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Published on August 31, 2007

He said consumer confidence would recover after the poll takes place at the end of the year. Domestic spending is expected to improve and this will also benefit the credit-card market.

"We believe spending via plastic cards will grow by 18 per cent next year, though it showed poor signs this year. For this full year, market growth is expected to be around 12 to 13 per cent," he said.

The business slowdown this year has also had an impact on the industry's distressed debts. Non-performing loans in the field of consumer finance stand at around 3.5 per cent, rising from 3 per cent early in the year.

Beside the sagging economy, the Bank of Thailand's new regulations on minimum monthly debt payment rates have also had an impact on the capability of credit cardholders to service loans.

In July 2006, the central bank introduced a rule requiring borrowers to make a minimum monthly payment of 10 per cent of their balance. The previous requirement was only 5 per cent.

The Monetary Policy Committee meeting on Wednesday decided to maintain the policy interest rate unchanged at 3.25 per cent.

Shoke said the unchanged rate would not, however, be of significant benefit to credit-card loan business. It is unlikely to encourage consumer spending because this is dependent mainly on the economic environment.

Credit-card providers have attempted to stimulate spending by launching promotional campaigns as well as offering special privileges during the economic slowdown.

Krungthai Card (KTC) senior vice president Teerapoj Chokeanantang said the company's promotion programme for credit-card loans was concentrated on necessary products and services for everyday life amid the gloomy economy.

KTC's campaign is mainly focused on petrol stations, restaurants, discount stores and hospitals.

Currently, spending per card per month via KTC credit cards is about Bt4,800, Bt2,000 of which comes from consumer goods.

The company launched a promotional campaign yesterday in cooperation with Watsons consumer goods stores.

Somruedi Banchongduang

 The Nation