Thitikorn (TK), a leading Thai hire-purchase provider in the motorcycle segment, is entering the Myanmar market with plans to operate a new company – Mingalaba Thitikorn Microfinance – established with registered capital of 200 million kyat (Bt4.85 million).
Myanmar is the third overseas country in which the listed company has invested, after Laos and Cambodia.
Praphol Phornprapa, TK’s deputy managing director, said on Tuesday that the new firm was 99 per cent owned by TK and aimed to operate micro-finance and other financial business in Myanmar.
It is currently awaiting approval from the Myanmar government for a licence to operate in the country.
He said Myanmar was one of many countries that TK had studied and was considered to be a high growth-potential market.
The population is around 52.89 million people, who are mainly of working age, and the Myanmar government has a strong policy to promote foreign investment in the country, he added.
TK, which is ready for Mingalaba Thitikorn Microfinance to commence operations as and when official approval is received from the local authorities, has already prepared the new office, working process, and manpower comprising both Thais and local staff, Praphol explained.
TK will be able to gradually increase the unit’s capital in accordance with the business size, which it expects to grow continuously as a result of the high market potential, while most consumers still find it difficult to access loans, he said.
The planned penetration of the Myanmar market by TK confirms the hire-purchase company’s policy to develop its overseas business to fit with its goal of achieving 50 per cent of its revenue from outside Thailand by the end of 2020.
TK currently has seven operative overseas branches, six in Cambodia and one in Laos.
It has already increased the registered capital of its Lao subsidiary by 5 billion kip to 10.25 million kip, or about Bt41 million, in order to serve its expansion plan in Laos.
Moreover, the company recently increased its registered capital in its Cambodian subsidiary from US$1 million to $2.5 million (Bt83.82 million) to serve its expansion by doubling the number of branches from three to six.
Praphol also confirmed that TK’s business results in Cambodia and Laos had grown rapidly during the first half of the year, by 93 per cent and 65 per cent respectively, with dramatically low bad debt enabling the portion of business from outside Thailand to increase from 2 per cent in 2016 to 3 per cent this year.