Ngern Tid Lor

International Finance Corporation (IFC) granted a loan amounting 3,000-million-baht ($100 million) to the non-bank financial institution (NBFI) Ngern Tid Lor Public Company Limited (TDLOR) – an affiliate of Bank of Ayudhya Public Company Limited (BAY). The investment comes as Thai enterprises at the micro-level are barely surviving the uncertain economic downturn caused by the ongoing pandemic. The fund is subject to expanding TIDLOR’s microlending portfolio to micro, small and medium enterprises (MSMEs). IFC further emphasized that the organization will also assist TIDLOR to access diversified funding from other sources that would facilitate the company to strengthen its credit risk management framework. According to IFC, MSMEs support 86% of the Thai labor force and contribute to 45% of the Kingdoms’ GDP. However, even at the pre-pandemic level MSMEs in Thailand face a funding gap of $41 billion which accounts for 10.3% of the Thai GDP. Funding options are further strained as the country faces economic uncertainties being equally compared to the “Tom Yum Kung” crisis in 1997 and also financial institutions tightening their lending criteria due to higher non-performing loans (NPL). According to CEIC data, as of March 2021 non-performing loans stands at $17.19 billion. This gives TIDLOR the opportunity to expand its lending portfolio since enterprises at micro are in dire need of funds during this wary time. NBFIs account for 5% of the Thai financial system’s total assets and are primarily focused on lending in high-risk portfolios such primarily informal workers, individual entrepreneurs, and MSMEs. Earlier last week TIDLOR posted a second-quarter net profit of 777.5 million baht which is an increase of 176.8%. According to Refinitiv Eikon consensus estimates with a consensus target price of THB 49.44, three analysts posted OUTPERFORM, four analysts posted BUY with and one NEUTRAL. Eikon’s model also rates TIDLOR 79 on a scale of 100 in terms of analyst recommendation.