The Thai Bankers' Association (TBA) plans to continue its push for the incorporation of data from utility bills into the National Credit Bureau (NCB) database as an alternative source for banks to consult when extending loans to the underbanked segment.
Using utility bills for alternative data will allow borrowers, especially low-income individuals, micro-, small and medium-sized enterprises (MSMEs) and SMEs, to access funding sources.
However, the idea of using the bills as alternative data has not progressed much. The TBA, in collaboration with related public and private parties, will continue to promote the practice, said TBA chairman Payong Srivanich.
Currently borrowers' loan payment records in the NCB is the key information banks use when reviewing loan applications.
Under the information-based lending concept, banks can use alternative data when considering SME loan approvals.
Mr Payong acknowledged there are difficulties for MSMEs, especially in the underbanked segment, to access bank loans because of insufficient financial data for loan approval analysis.
He said if borrowers' information can be pooled onto an open data platform, it will give borrowers better access to financial sources.
In Thailand, related agencies have cooperated to develop digital technology and infrastructure to provide digital financial services to support the operations of small businesses.
These include the Pao Tang mobile application developed by Krungthai Bank, and also the PromptPay and PromptBiz digital payment platforms.
The Pao Tang mobile app was initially developed to serve the government's welfare projects, before expanding to cover the economic stimulus schemes during the Covid-19 pandemic.
There are more than 40 million users of Pao Tang, of which 1.6 million are small merchants or MSMEs.
For the next phase, Pao Tang will offer a digital loan service, which will offer MSMEs better access to loans, Mr Payong said.
PromptBiz, a digital payment infrastructure system for the business sector, is scheduled to get off the ground next year.
The TBA's business direction for 2023 will continue to focus on promoting financial inclusion and digital development in order to reduce financial inequality in Thai society, he said.
The TBA will also help SMEs access financial facilities next year, in accordance with the changing global economic landscape as well as environmental, social and governance concepts, said Mr Payong.
