KBank and Carabao team up for lending service

Kbao service set to debut in 2023

Carabao Group’s Tookdee Convenience Stores.

Kasikornbank (KBank) has partnered with Carabao Group, the maker of the energy drink Carabao Dang, to offer Kbao-branded personal loans at Tookdee convenience stores.

The move is part of their partnership announced in July to invest in the expansion of Tookdee convenience stores, which are owned by the Carabao group.

As part of the partnership involving part of the Kbao service, KBank and the Carabao conglomerate will create a joint venture, Kbao Co, in which the bank will hold a stake of more than 50%, while the Carabao group will hold the balance.

The service will offer both commercial and retail loans to all of the Carabao Group’s supply chains.

In terms of retail lending, the joint venture has applied for a personal loan license from the Bank of Thailand and plans to offer the loan under a “buy now, pay later” (BNPL) model.

The joint venture develops the technological infrastructure system of the Kbao service.

He expects the service to debut next year, said Chaya Chansmitmas, Head of TeamX (CEO Office) at Carabao Group.

For the personal loan offering under the BNPL model, Kbao will provide loans to individual borrowers for the purchase of goods offered by Carabao Group, including at Tookdee stores.

Normally, Tookdee store owners give credit to their retail customers when they purchase merchandise from their stores. This classic credit offer is identical to the BNPL concept.

The Carabao Group will use the technology infrastructure to support Tookdee store owners’ offering of their traditional services and their traditional credit offering to customers.

The Kbao financial service will be offered through offline and online channels, depending on the financial behavior of borrowers.

Borrowers will need to be members of Tookdee stores.

The amount of credit they would be offered would depend on Tookdee store owners, who know their customers well because they live in the same communities, Chaya said.

Mr. Chaya said the line of credit given to borrowers would be debited when borrowers purchase goods from Tookdee stores or Carabao vans, which fall solely under the Carabao Group ecosystem.

The loan will neither be a cash remittance nor a transfer of funds to the borrowers.

Given the technology-enabled financial services, Kbao would provide more opportunities for individual borrowers, who largely belong to the underbanked segment and live in remote areas, to better access a source of finance, he said. he adds.

He said customers would enjoy greater convenience and a more reasonable rate of interest compared to loan sharks.

Kbao’s interest rate cap was set at 25% per annum in accordance with central bank regulations.

Mr Chaya said the lending service had yet to finalize its retail lending growth target, which should be in line with the expansion of Tookdee stores.

There are currently around 5,000 Tookdee stores and the aim is to increase the number to 10,000 by the end of this year before increasing to 20,000 in 2023 and 30,000 in 2024.

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