CFG SERVICES' young new managing director has outlined his ambitious long-term vision to turn the company, better known as Ngern Tid Lor ("Money on Wheels"), into a financial convenience store.
CFG promoted Piyasak Ukritnukun, 33, to managing director last October. He was previously vice president for marketing and business development.
He said CFG must move beyond auto refinancing. Its branches nationwide can be one-stop convenience stores offering non-credit products.
People’s basic financial needs are credit, savings, transactions and insurance. CFG is known as a credit provider, but in the long term, customers will require more.
He compared the future of Ngern Tid Lor to convenience stores that offer not only consumer products but also counter services to receive bill payments.
"No one in this segment seriously offers products and services to unbanked people, but we will, because we have seen a lot of opportunities," he said.
He admitted that even though Ngern Tid Lor had been in the refinancing market for more than 30 years, it still fell short in showing how its products are better than its rivals’.
Building awareness is one of his challenges, he said, as many customers still don’t know how the company differs from local finance companies.
"Local finance companies focus on making profit through over-lending, but we do not. Our objective is responsible lending and giving loans in line with the customer’s capabilities, because we don’t want to seize a customer’s assets. If customers are tempted to borrow more, we will recommend a repayment period extension instead, which is the best choice so they don’t find it too tough to pay their debts," he said.
Unlike local finance companies, Ngern Tid Lor helps unbanked customers access loans from banks, because their credit data will be reported to the National Credit Bureau.
He said the company had encouraged customers to pay their instalments on the due date and offered discounted interest rates for those who want to pay off the full debt before it is due.
Another challenge is that many players are pouring into this segment, including banks with greater capital. His predecessors as managing director did not face this much because the refinance market in previous years was not as seriously competitive as it is now.
Ngern Tid Lor has aggressively promoted auto refinancing for many years, and now must accept more competitors. Piyasak said he would find strategies to defend his firm’s market leadership. One way to do this is to secure existing well-disciplined customers with attractive offerings.
CFG has a base of 145,000 customers.
CFG is a subsidiary of Bank of Ayudhya, now a member of the Bank of Tokyo-Mitsubishi UFJ, which has told CFG’s management team that it is ready to support it.
Up to now, CFG has been funded by Krungsri, but it is now preparing to raise funds from the capital market for the first time through a debenture issue. It will issue debentures worth around Bt1 billion to Bt1.5 billion next month.
After almost six months as managing director, Piyasak said was still learning every day, because the scope of the work has broadened.
He is the youngest among the management team, so it is important to recognise and respect the experience of his older colleagues. Because he has worked at the firm for six years, they know him well and he enjoys good cooperation from them when he seeks their advice.
In his previous position, he needed to focus on quickly developing marketing and projects, but as the managing director, he sees that he should take the time to take on uncomfortable tasks, especially with human resources.
"People management at headquarters and in branches is different. I have to communicate with all 1,700 people, not 50 as in the previous position. I have spent time reading management tips from books or online research," he said.