Builders want lending criteria to be relaxed
The National Credit Bureau (NCB) has been urged to shorten the availability of loan repayment records from three years at present to two years to increase credit opportunities for those who may have had bad repayment records in the past.
Speaking at a seminar entitled "The Credit Bureau and Lending Standards", Atip Bijanonda, president of the Thai Condominium Association, yesterday said the record duration of borrowers, whose credit information is collected by the NCB, should be flexible, depending on the state of the economy. He suggested that given the current economic slow-down, the availability of duration should be shortened to two years to increase the consumer's chances of securing loans, which would eventually stimulate the economy. "Right now, banks' rejection rate for mortgage applications has risen to around 30 per cent of the applications received, from 10 per cent before the [1997] crisis," he said, partly blaming the long period of credit information collected by NCB for the situation. Kasikornbank senior vice president Chatchai Payuhanaveechai said that 26 per cent of mortgage applications had been rejected on the basis of NCB records. However, insufficient income to service the debt was the main reason, accounting for 47 per cent of the rejections. He said 10 per cent of the rejection of loan applications could be attributed to banks' credit-scoring and 17 per cent to other factors. Sungsit Piriyarungsan, chairman of the Fiscal Banking and Financial Institution Committee, said the committee would consider relaxing some of the rules of the NCB, which were seen as obstacles for credit, but it would be discussed with the officers and financial institutions later. If financial institutions eased lending criteria during an economic slow-down, it would help banks to increase lending and borrowers in terms of access to funding sources. Chatchai said that during the four days of the 2007 Money Expo, home-buyers applied for mortgages worth about Bt10 billion, well above the bank's lending target of Bt1 billion. He attributed the special lending rates on offer as the main reason for large number of applications. Anchalee Besuwan, senior executive vice president of Siam City Bank, said the bank had received 2,500 housing loan applications during the fair, worth a total of Bt5.2 billion. The bank had set a Bt3-billion lending target for the event. Siam Commercial Bank reported receiving 2,349 mortgage applications, altogether worth BtBt6.71 billion.
Somruedi Banchongduang The Nation
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