Fintech company Peer For All (PFA) plans to offer a peer-to-peer (P2P) lending service in the last quarter of 2022.

PFA is jointly owned by two SET-listed companies, Aqua Corporation Plc and News Network Corporation Plc, which own 60% and 40% respectively.

PFA will take over P2P lending platform NestiFly Co, which was the country’s first P2P lending platform to receive a business license from the Bank of Thailand, according to statements released yesterday by PFA’s two largest shareholders on the Stock Exchange of Thailand.

PFA expects lending growth on the digital platform of 3 billion baht in 2023, said Aqua’s Executive Director and Managing Director, Chaipipat Kaewtrirat.

Initially, PFA plans to offer secured loans, which will require borrowers to use their SET100 shares as loan collateral. The company has set a loan-to-value (LTV) ratio of between 30-50% to control the risk of the digital lending service.

For this business model, SET investors are the primary target clientele for PFA’s lending service.

As the platform requires equity as collateral, if there is a higher risk when equity prices fall, the platform will require additional collateral from borrowers or demand faster loan repayment, or will force the borrower to sell shares to repay the loan, depending on the borrower’s LTV ratio, Chaipipat said.

The P2P lending platform does not set lending targets. It only asks if the loan is for personal or business purposes.

The P2P interest rate for loans is in the range of 3.5-4% per annum with a loan term of 3-9 months, and stipulates a maximum line of credit of 50 million baht as per the license P2P.

The platform does not set a minimum credit line.

He said the next step for PFA is to expand its requirement to allow for other types of loan collateral besides equity. These would include real estate and cars.

The company plans to offer unsecured loans in the next phase. This decision depends on the growth of the company’s activities and the approval of the central bank.

“We are also interested in the upcoming central bank license to virtual banks, but we are awaiting clearer instructions from the regulator,” Chaipipat said.

PFA plans to offer several financial services on its digital P2P platform, including insurance and virtual banking.