Oct. 6--Financial institutions are once again promoting unsecured loans on the back of the improving economy and higher consumer spending.

Krung Thai Card Plc has resumed activities in the personal loan market after reducing its business in the sector for a year mainly due to higher risks posed by the recession, said senior executive vice-president Thawatchai Thitisakdiskul.

"The local economy has bottomed out. Now it has some signs of improvement, which are boosting consumer confidence and purchasing power. That's why we are eager to extend personal loans again," he said.

The country's largest credit card company has about 400,000 customers with a personal loan portfolio totalling 15 billion baht.

The company charges annual interest rates of 20 percent to 28 percent on its personal loans depending on the customer's risk. Bank of Thailand regulations cap the maximum charge at 28 percent per year.

KTC has also eased its conditions on credit card approvals due to the brighter economic situation, said Mr Thawatchai.

KTC plans to expand its credit card base in the fourth quarter as a result of the improved sentiment.

It previously wanted to keep its credit card membership at the 1.6 million mark.

For the first nine months of the year the company's card base grew by 130,000 cards, with a 5 percent growth in spending per card.

The economic recovery and seasonal factors will help encourage credit card spending in the final quarter to meet the institution's spending growth target of 10 percent to 15 percent for the year.

Credit card spending in the final quarter is normally about 30 percent higher than in the previous three quarters.

KTC is planning promotional campaigns with marketing budgets of about 30 million to 40 million baht in the last quarter to stimulate the overall credit card market, said Mr Thawatchai.

Separately, Chatchai Payuhanaveechai, a first senior executive vice-president at Kasikornbank, said the bank intended to increase personal loans when the economic climate improves.

KBank targets new-loan growth of 800 million baht this year. The bank's annual interest rate for consumer credit stands at 20 percent to 28 percent with a maximum credit line of 1.5 million baht.

KTC shares closed yesterday at 12.90 baht, down 10 satang, in trade worth 2.7 million baht.

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