Government Housing Bank in Thailand Thrives on Attractive Home-Loan Plan.

Dec. 7--The Government Housing Bank's share of the home-loan market is increasing on the back of a programme to extend fixed-interest loans to the public and allow civil servants and state enterprise employees to borrow 100 percent of the property's valuation.

Bhichar Damrongpiwat, the bank's president, said that by the end of October the bank held a 33.1 percent share of the market, up from 30.2 percent last December. Commercial banks saw their share drop to 52.9 percent from 57.9 percent.

"Initially, we expected that our share would fall to 21 percent or 22 percent this year."

A mountain of non-performing loans generated by the financial crisis has made commercial banks reluctant to approve new credit despite a steady increase in deposits.

With excess liquidity, the banks have shifted their focus to the mortgage market, believing that home loans carry the least risk of default. The GHB noticed the trend in 1999, with several commercial banks offering low interest rates on home loans or fixed interest for a set period.

Mr Bhichar said the GHB was able to break the momentum of home-lending by commercial banks because homebuyers trusted the GHB's reputation. Its loan-approval process was not time-consuming and expensive.

"We're more flexible in solving non-performing loans with homebuyers and try to help them retain ownership as long as we can," he said.