SINGAPORE, Sept. 19, 2022 /PRNewswire/ — The Asia Responsible Enterprise Awards (AREA) 2022 is pleased to honor 72 exemplary award recipients for championing ESG to build a resilient world and a sustainable future for all.
The AREA is the most prominent CSR recognition program across Asia initiated by the region’s leading NGO, Enterprise Asia. The award recipients were selected through a stringent judging process which is based on the 3 criterions of effectiveness and reach, relevance, and sustainability.
Government Savings Bank‘s Award-Winning CSR Initiative
For more than 109 years in Thai society, Government Savings Bank (GSB) has had strong purposes to promote savings and improve Thai people’s financial literacy. GSB is determined to make a positive impact through dual missions – commercial and social missions. GSB aims to reduce inequality and lower poverty in Thailand, making it recognized as a “Social Bank”. The bank’s ‘Car and Motorcycle Title Loan’ program was awarded under the Social Empowerment category.
The ‘Car and Motorcycle Title Loan’ is a loan in which the registration book is kept as a guarantee for repayment while the debtors still own and use their cars and motorcycles. This business is growing with only a few main players, allowing them to enjoy a good profit. While this type of loan is popular among grassroots, the 24-28% interest rate charged is unreasonably high compared to the 16% interest rate charged by credit card which is an unsecured loan.
Seeing the opportunity to help grassroots through the business, GSB enters car and motorcycle title loans by establishing a joint venture, Fast Money Co., Ltd., with the main objective of helping grassroots access fairer cost of finance and targeting to reduce the market interest rates by 10%. The key features of GSB’s car and motorcycle title loan are the lowest interest rate and offer quick approvals with no need for a guarantor or financial status checking to help ease access.
GSB believes that entering the car and motorcycle title business is one of the approaches that has the potential to create a positive impact on society. With GSB’s strength in serving low-income people and a large customer base of more than 12 million people, GSB needs to find an experienced partner to create a synergy with its strengths. Therefore, GSB partnered with Srisawad Corporation PCL., a well-known nonbank retail loan provider in Thailand, and established a joint venture, Fast Money, Co., Ltd. GSB’s car and motorcycle title loan is accessible across the country through more than 5,000 branches of GSB and Srisawad. The program also serves GSB’s direction as a ‘Social Bank’ as it helps reduce poverty, lower inequality, and increase fairness in society by enabling customers to access fair cost of borrowing, as well as increasing access to formal finance.
Launching in April 2021, GSB offers a 16-18% interest rate which is the lowest in the market. Within a year of operation, GSB achieved its target of THB12 billion in the total loan amount. It granted the loan to more than 800,000 clients. More importantly, its intervention force the competitors to lower interest rate for keeping their existing customers and attracting new ones. It also reduced the interest structure of this market by 10%, which is quite an impressive outcome. The accomplishment of the project is not only for GSB, but it shows the success of market competition promotion and the benefit to low-income people throughout Thailand. GSB intervention relieves them from high-interest expenses, making them accessible to reasonable costs of finance, reducing loan shark victims, and as a result, reducing inequality in Thai society.
The project is integrated into GSB’s business, and it aims to maximize social benefit instead of profit. Therefore, the interest rate is designed to earn just sufficient profit to carry out the business. With its intention to help the clients access formal debt without difficulty, GSB manages to provide an easy and comfortable way to access formal debts. The clients can make a transaction through more than 5,000 branches of GSB and its partner, Srisawad Corporation PCL. In addition, the clients can receive and repay the money through GSB mobile application, MyMo, without any fee charged. The project will continue with a more ambitious target of helping 1.2 million clients with a total loan amount of THB20 billion (around USD560 million).
About Enterprise Asia
Enterprise Asia is a non-governmental organization in pursuit of creating an Asia that is rich in entrepreneurship as an engine toward sustainable and progressive economic and social development.
About Asia Responsible Enterprise Awards (AREA)
The Asia Responsible Enterprise Awards program recognizes Asian businesses for championing sustainable and responsible entrepreneurship in the categories of Green Leadership, Investment in People, Health Promotion, Social Empowerment, Corporate Governance, Circular Economy Leadership, Responsible Business Leadership, and Corporate Sustainability Reporting. For more information, visit: www.enterpriseasia.org/area/.
Ms. Wong Poh Ern
(60) 3 7803 0312
SOURCE Enterprise Asia