SET-listed Saksiam Leasing (SAK), an auto and personal loan provider, wants to expand by providing loans for residential solar rooftops, aiming to grow the portfolio of the new business to 1 billion baht this year.
SAK and TC Renewable Energy signed a memorandum of understanding yesterday to set up a joint venture, Saksiam TC Energy, which will provide both loan and solar rooftop installation services.
The venture has total registered capital of 50 million baht, of which 35% is held by SAK and the remainder by TC Renewable Energy.
Provincial households are the company's target market for the new services and the partnership aims to install solar rooftops for 5,000 provincial households with an average credit line of 200,000 baht per household this year.
The company expects to expand its loan portfolio for the new business segment to 1 billion baht this year, said SAK managing director Siwaphong Boonsalee.
The market for solar rooftop installation has great potential and the government is promoting the use of clean energy for both businesses and households, he said.
This new business should contribute healthy revenue over the long term, said Mr Siwaphong.
Phurit Laocharoen, chief operating officer of TC Renewable, said the country's solar rooftop market is expected to grow at an average of 22% per year, reaching 6.7 billion baht in 2025.
Residential solar rooftop installation should help to reduce monthly power bills by 2,000-7,000 baht.
Saksiam TC Energy expects to install solar rooftops for at least 100,000 households over three years, giving them the capacity to produce 500 megawatts of electricity from solar power.
In terms of SAK's existing auto loan business, Mr Siwaphong said the company aims to grow loans outstanding by 13 billion baht this year, a gain of 25% year-on-year.
Car title loans make up the largest proportion at around 80% of the total vehicle loan portfolio, with the remainder being car hire-purchase loans, personal loans and nanofinance.
Motorcycle loans make up only 5% of the total loan portfolio.
The Office of the Consumer Protection Board (OCPB) recently introduced regulations stipulating the maximum rate for motorcycle loans is 23% per year, which would reduce the company's interest income for this loan segment by only 1-2 million baht per year.
These regulations would not significantly impact the company's revenue, he said.
The OCPB set a ceiling interest rate for new car loans of 10% per year, or an average fixed rate of around 5.5% per year, while for used car loans, the ceiling is 15%, or 8.5% of the fixed rate.
Motorcycle loans have a maximum ceiling rate of 23%, or 12.5% of the fixed rate.
All the new rates take effect on Jan 10, 2023.
