International Finance Corporation (IFC), a member of the World Bank Group, is proposing to extend a three-year loan of up to $100 million and a cross-currency swap to Ngern Tid Lor (NTL), a non-banking financial institution in Thailand.
IFC’s proposed investment is aimed to support NTL to grow its local currency financing to micro and small enterprises, according to its disclosure. The cross-currency swap is likely to help NTL hedge the currency and interest rate risks.
NTL offers vehicle title loans, hire purchase and insurance brokerage to the underserved micro and small enterprises and individual customers across the country. It had total assets of $1.6 billion and gross loan portfolio of $1.5 billion as of September 30, 2020.
The project is expected to contribute towards addressing the financing gap on micro and small enterprises in the country, particularly in the less developed areas of Thailand where NTL has a strong presence, IFC said.
“IFC is expected to play a catalytic role to enable NTL to access to international financial markets amidst the impact of the COVID pandemic and the perceived risk of non-bank financial institutions sector. This will contribute to diversifying the company’s sources of funding and support it to strengthen financial discipline and improve resilience,” it added.
NTL is headquartered in Bangkok with over 1,000 branches across Thailand. It is expected that the proposed loan will be used to support the micro and small enterprises across the country.
NTL is a regulated non-deposit-taking NBFI in Thailand and is currently 50 per cent owned by the Bank of Ayudhya (BAY), and 44 per cent owned by a fund managed by CVC Capital Partners. BAY is 76.8 per cent owned by MUFG Bank in Japan.