Mee Tee Mee Ngern Co, a Government Savings Bank (GSB) subsidiary, aims to be among the top five domestic land collateral loan businesses by the end of next year, says chief executive Isara Wongrung.
He said based on earnings in the first half of this year, the company granted land loans worth 2.97 billion baht to 853 customers.
Mee Tee Mee Ngern expects to reach its target of 7 billion baht and gain a net profit of 35 million baht this year, said Mr Isara.
He expects by the end of 2024, its second year of operation, the company will be one of the top five domestic land loan businesses.
There are three major land loan companies in the country, each of which has outstanding loans of roughly 10 billion baht.
Land collateral loans are in high demand, amounting to around 10 billion baht each year (excluding those in the informal lending system), according to data from the Department of Lands.
The company is a joint venture between GSB, Dhipaya Group Holdings and Bangchak Corporation, with each holding a 49%, 31% and 20% stake, respectively.
The company extends loans by using land as collateral in the form of mortgages and consignments. For mortgages, it charges an interest rate of 7.25-9%, which is far lower than the 15% land loan rate in the market.
The loan does not require a check of borrowers' records at the National Credit Bureau, nor the need for a guarantor, said Mr Isara.
It was established with registered capital of 1 billion baht with an initial credit line from the GSB of 5 billion baht.
In the last quarter, the company would request an additional 5-billion-baht credit line, totalling 10 billion baht, to expand the business next year.
The maximum loan period is five years with maximum lending of 50% of the market value of the appraised land, or 70% of the land appraisal value by the Treasury Department.
The amount would be limited to between 1 and 5 million baht for individual borrowers and no more than 50 million baht for juristic entities.
Borrowers do not have to pay the principal in the first year, paying only the interest.
Starting from this month, the company will offer consignments which require immediate transfer of land ownership from the land owner to the company whose contract will be on a year-to-year basis.
The interest rate will be slightly lower than a mortgage at 7-8.5%.
Mr Isara said the company was founded with the objective of easing people's interest burden and to serve entrepreneurs, especially small ones, seeking urgent liquidity.
