This episode of SUITS by Bangkokbiznews features an exclusive interview with Piyasak Ukritnukun, Managing Director of Ngern Tid Lor Public Company Limited (“TIDLOR”), once known as “the youngest MD in the finance industry,” who was behind the successful transformation of Ngern Tid Lor to a top microfinance company in Thailand. Next stop, a virtual world.
Piyasak Ukritnukun, Managing Director of Ngern Tid Lor Public Company Limited (“TIDLOR”), was named the youngest MD in the finance industry 8 years ago when he was 32. Now 39, his important mission is to move Ngern Tid Lor forward after the company was successfully listed on the Stock Exchange of Thailand (SET) on 10th May 2021.
Piyasak grew up in a middle-class family in the United States, where his parents opened a Thai restaurant. After graduating from high school, he returned to Thailand to study in the BBA International Program at the Thammasat Business School.
After college, Piyasak worked at Boston Consulting Group where he began to take a serious interest in microfinance.
In 2008, Piyasak, at the age of 26, started the first step at Ngern Tid Lor as a Chief Marketing Officer. Although Ngern Tid Lor at that time was just a little-known upcountry financing company, as a young, passionate executive, Piyasak poured all of his energy into his work. And 5 years later, he was promoted to Managing Director, becoming the youngest MD in Thailand’s finance industry. He successfully turned Ngern Tid Lor into a top microfinance brand and, in 2021, listed the company on the Stock Exchange of Thailand (SET).
When he was young, Piyasak was allergic to everything, including pollen and even sunlight. He was also lazy. However, hard work has helped him overcome challenges to achieve rapid success.
“It is all about timing. Fortunately, my experience from abroad led me to look at the microfinance business differently from everyone else. Twenty years ago, this business didn’t exist in Thailand. No one cared about it. However, it was undeniable that there was inequality in Thai society. To provide the opportunity to allow the middle class to grow, we needed to apply our knowledge we have learned from abroad to make lending practices more appropriate to Thai people and culture.”
Microfinance in Ngern Tid Lor Style
Piyasak also clarified the microfinance concept that underpins Ngern Tid Lor’s work. He said unsecured microfinance loans were common in other countries. The underlying principle is simple: people want access to a source of funds, they care less about the interest rates than they do about how much they need to repay per month and whether they will have the ability to do so. These people are self-employed with irregular income. They must have the confidence that they will be able to make repayments before taking loans. He found that 99.9% of those who want to take out loans are honest people.
Ngern Tid Lor also took into consideration Thai people’s habit of cherishing the properties they own and Thailand’s explicit auto purchase rules and regulations to come up with its idea of auto title loans.
What Piyasak wants even more is to differentiate Ngern Tid Lor’s microfinance business from other financial products. While generating interest and profits, he expects “microfinance to create opportunities for our customers to improve their quality of life as well.”
Current Success: “Quality People and Tech Company”
Microfinance business traditionally emphasizes branching and hiring more staff members. However, today the key to driving a microfinance business is digital technology because technology is the only thing that can reduce costs and move the organization forward sustainably. To build an organization that can be resilient over the long term, “we must equip branches with up-to-date technology”.
Piyasak says that in this highly competitive industry, one can learn from the advantages and disadvantages of one’s competitors. Ngern Tid Lor has over 1,500 branches. Because it prioritizes quality over branch quantity, it has grown at a slower pace than its competitors. Rather than increase its footprint, the company has adopted innovative ideas and methods to improve performance quality with fewer branches, introducing technology, risk management practices, and data analytics that it has learned as an affiliate of Bank of Ayudhya.
Ngern Tid Lor is able to offer small loans with a minimum amount of 4,000 baht. No commercial banks can offer loans this small. To make these small loans financially viable, the company must have very low costs. To reduce costs while maintaining a sustainable business, the company must rely on technology to help provide microfinance loans to the underbanked.
Thus, it is a sound decision to invest tens of millions of baht in a digital system if that system will enable the company to make millions of lending transactions of 4,000 baht.
“We are turning our branch staff into an iron man, to develop and empower them with the help of technology. It’s a concept of building a distinct organization.”
No organization can escape from embracing technology, and in the end it all comes down to figures. Today, Ngern Tid Lor has an average lending amount per branch 3-4 times higher than its competitors and average insurance sales per branch 10 times greater than its competitors.
At the same time, corporate culture needs to be constantly improved. Piyasak told us that he aims to build a win-win organization for Ngern Tid Lor, its employees, and its customers. If an organization takes good care of its employees first, and is able to win their hearts, build engagement and belief in what they do, as well as provide them with a competitive salary, they will be more dedicated to their work than the organization expects. “When employees are more engaged, believe in their work, and feel safe, they will be eager to think, try, and make right decisions for the organization and customers.”
Because he does not like wearing suits and ties, Piyasak began to try creating a more casual working environment at the Head Office. When employees are more relaxed, they will become more creative. Many people have told him, “You are like a tech company.”
Because he does not like wearing suits and ties, Piyasak began to try creating a more casual working environment at the Head Office. When employees are more relaxed, they will become more creative. Many people have told him, “You are like a tech company.”
Piyasak said that he and his management team still frequently make field visits. “Figures can indicate problems, but going to meet people allows us to discover the root causes of the problems and explore solutions.” He plans to make at least 1-2 visits to every branch every year.
Piyasak always carries a book with him. He said he does not like reading, he reads because he does not want to be unable to keep up with the world. “There are things that we should know, but we don’t know if we don’t read.” He tries to read at least one book a month, and his record is 20 books in a year. In his worst year, he read 10 books.
Next Step: Expanding to Other Countries and a Virtual World
For the future of Ngern Tid Lor, Piyasak has three goals in mind. The first goal is to re-explore opportunities he has encountered on his journey but did not seize. Piyasak’s path to success has been different from other people. It could be called a fast track, like getting on a plane and flying directly to a destination. Although he has never turned off-route or made a transit, he was able to see opportunities along the way nonetheless.
These days, people from ASEAN, Europe, and the United States have visited Ngern Tid Lor to learn how the company operates. This allows Ngern Tid Lor to see opportunities to expand business abroad. His second goal is to take Ngern Tid Lor’s microfinance business global “to create innovative impact and help people around the world”.
The third goal is “to venture into the Metaverse or a virtual world.” Piyasak is currently studying whether the Metaverse could disrupt the microfinance business. He is ready to invest in this new opportunity, as he sees the Metaverse as a novel channel for many types of transactions, including financial transactions.
“There are many people who don’t like making mobile transactions. They may be happy to have a device that they can enter a virtual world, where they can interact with and receive services from staff, instead of using a flat screen.”
Piyasak believes that the Metaverse will change the way people experience the world. As he said, “Ngern Tid Lor now has over 1,500 branches. The next branch may be in the Metaverse.”
Source: Bangkokbiznews