Thai Banks Offer No-interest Appliance Loans

[george]

ENERGY-SAVING LOANS

Banks offer no-interest appliance loans

Government money bankrolls scheme

BANGKOK: -- Five government and commercial banks have begun offering interest-free loans, repayable over 12 months, for customers purchasing energy-saving electrical appliances.

The loans are financed by a Bt1-billion Energy Ministry programme aimed at encouraging consumers to change out old electrical equipment that consumes too much electricity for new appliances with energy-consumption label No 5.

The campaign focuses on air-conditioners and refrigerators but also covers other appliances. Those buying new air-conditioners or refrigerators with the interest-free loans will be obliged to destroy the old appliances and send photographs of the wreckage to the Energy Ministry. This condition does not apply to other appliances or electrical equipment.

The banks who will lend the government funds are the Government Savings Bank (GSB), the Bank for Agriculture and Agricultural Cooperatives (BAAC), Krung Thai Bank (KTB), Bank of Ayudhya (BAY) and Bangkok Bank (BBL).

The banks will cooperate with electrical-equipment stores for payment, while customers will not need to offer cash or down payments.

Applications for the loans will be accepted for the next 18 months, and after approval customers will have 12 months to repay the loan principal, interest-free.

Air-conditioners purchased under the scheme are limited to 18,000 British thermal units, and the ceiling for loans will be Bt30,000. For other kinds of electrical equipment, including refrigerators and energy-saving fluorescent lamps, the loans will be limited to Bt10,000 each.

The GSB is the only bank that will allow walk-in applications for loans to buy any kind of energy-saving equipment at any branch. After selecting the equipment, customers must obtain an application form, either from the bank or its website, www.gsb.or.th. The shop-owner must sign the form, which can then be submitted to a nearby branch of the bank. Upon approval, the bank will issue a cheque for the customer to buy the equipment.

The GSB plans to recommend the loans to its good-credit mortgage customers. Walk-in customers or bank staff will need a good-credit guarantor.

The BAAC will offer the loans only for its customers who have a good credit history or receive salary payments via the bank. They will also need a personal guarantee or collateral, such as a deposit account, along with property assets. The bank's Taweesin saving certificates may also be used as collateral for 80 per cent of the value.

Customers can also select electrical equipment from the BAAC's Agricultural Marketing Cooperatives, located in each province, or at the shops that the bank guarantees.

KTB will also limit its lending to salary-payroll customers but will provide the service at each branch.

BBL is offering the quickest way for getting the loans, because it will lend only to customers via its credit cards. Therefore, people who want a household energy-saving loan from BBL must first apply for a credit card. However, borrowers can buy only Saijo Denki-brand air-conditioners and not other kinds of electrical equipment.

BBL executive vice president Ruchanee Nopmuang said the bank might offer the loans for a greater variety of appliances later but

that only Saijo Denki air-conditioners were available now.

Saijo Denki International managing director Somsak Chittipalungsri said the company was offering super-hybrid air-conditioners, which saved 40 per cent of the energy used by other brands, for Bt26,900, which was Bt12,000 lower than the regular price.

BAY is not offering the loans to individual customers. It plans to deal with corporations that consider the loans beneficial to their employees, and interested employees can apply for the loans via their company.

Tinnakorn Boonyakalin, senior vice president and manager of KTB Personal Loan Products Department, said participating banks would receive a management fee from the Energy Ministry. Every two months, all of the banks will meet with ministry officials to share information and make debt-settlement payments.

"First, each bank will receive Bt200 million from the ministry, and every two months we'll meet and the banks will have to return all of the money paid by customers over the previous two months," he said.

-- The Nation/Xpress 2008-06-26

[TAWP]

"Those buying new air-conditioners or refrigerators with the interest-free loans will be obliged to destroy the old appliances and send photographs of the wreckage to the Energy Ministry."

Should I smash it with an ax and hammer myself or can I throw it into the street and let a truck take it out?

[sgunn65]

I need a new electric toothbrush. Where do I apply?

[slapout]

The going price for air con in Chiang Mai used to be 1,000 baht /1,000 btu. Guess price will increase as loan up to 30,000 for 18,000 btu will be effective. We have some real rocket scientists working to control electric usuage, cost of living etc in the LOL (land of leaches).

[Tony Clifton]

energy-consumption label No 5.

I think someone is printing a fresh batch of those right now.

[bkkjames]

energy-consumption label No 5.

I think someone is printing a fresh batch of those right now.

You got to hand it to BBL. By only allowing purchases on their credit cards, not only will they get the money up front from the government, this also guarantee 3% from the retailer.

I am betting they actually came up with this new policy for our government to spur on sales of energy saving appliances.

Something like this....

Two poo-yais sitting in BBL chatting together..."You know this bad economy thingy has really dented our sales commissions because nobody is spending"

The other guy says, "Yes I wonder if we can convince our golfing buddies over there at the government to do something about it?

The first guy replies " I got it, let's tell them put in place an initiative for people to avail no interest appliance loans, good for the purchaser, good for the retailer, good for the economy and best of all - very good for us!"

The 2nd guy comments, "That's why we have these fancy titles and mutli-million baht homes, wait till next week when I suggest that we try to convince them to name Thailand the Green $ Hub of the World, whatever that means."

[astral]

What happens when people default on these "free" loans?

Is there a good market for secondhand appliances...........

[dotcom]

There'll be a big market for pictures of smashed up appliances.

[sriracha john]

What happens when people default on these "free" loans?

Absolutely nothing... it'll all get written off on the back of the taxpayer... remember, this is Thaksin-style economic policies...

[sriracha john]

There'll be a big market for pictures of smashed up appliances.

*Disclaimer: for the less astute, this is not a serious post. If I was serious, I would have asked for sip ha baht.*

[astral]

Hey!!!

That looks like my old AC unit.

[MaiChai]

I though every fridge/airconditioner/etc that has been made in the last 10 (or 15?) years has had a '5' catagory sticker on it anyway?

Did most of Thailand have electricity 10 (15?) years ago, and in which case the appliances they have are already energy efficient since they have '5' stickers anyway? Anything older than 15 years is probably a pile of rust?

Did they miss these obvious facts, or is there a hidden agenda we are missing ?

Edited June 30, 2008 by MaiChai

[Tony Clifton]

I though every fridge/airconditioner/etc that has been made in the last 10 (or 15?) years has had a '5' catagory sticker on it anyway?

Did most of Thailand have electricity 10 (15?) years ago, and in which case the appliances they have are already energy efficient since they have '5' stickers anyway? Anything older than 15 years is probably a pile of rust?

Did they miss these obvious facts, or is there a hidden agenda we are missing ?

You haven't noticed all the Vuiton bags, Gucci, cheap DVD movies, Rolex watches that the common Thai wears or uses?

How easy is it to print a Category 5 sticker and slap it on appliances?

Can't trust anything here.

It's also a major dumping ground for products that failed Quality Check from major companies, the good stuff is exported.