smcthailand

Benefits of SMC
SMC’s business activities under the housing loan purchase programme, has created substantial benefits to housing
mortgage financing system of commercial banks and other financial institutions.  Also, such benefits have been
extended to the borrowers, public, and institutional investors who have invested in SMC bonds.  Those benefits can
be summarised as follows:
Benefits to Financial Institutions:
- To reduce burden of financial institutions in the maintenance of capital to risk assets ratio by selling of their housing
loans under SMC’s securitisation programme, in exchange for cash/bonds so that the capital to risk assets ratio would
be improved;
- To assist financial institutions with low and fixed long-term funding cost for better and effective management of financing cost;
- To create new varieties of housing mortgage finance products for financial institutions that would lead to the new development
of housing loan market in the future.
 Benefits to Investors of SMC Bonds:
- Status of SMC bond is equivalent to that of state-enterprise bond;
- To increase new varieties of financial instruments in the financial system and to establish the Benchmark Yield Curve to the fixed
income market;
-  Enable effective investment planning as it is long-term investment with fixed interest rate.
Benefits to Economic System and Housing Mortgage Financing System:
- The purchase of housing mortgage loans by SMC would accelerate financial institutions to expand their housing loans.  Also,
real estate developers could be able to sell their housing projects or unloading their housing inventories to the market, as home
buyers would easily be able to acquire for low and fixed interest rate financing;
- SMC business activities are in accordance with the government economic stimulation policy whereby people will easily be able
to purchase their homes with inexpensive and stable financing cost which will lastly benefit real estate business as a whole;
- The operations of SMC would help reducing funding mismatch of financial institutions via the raising of long-term funding for
long-term housing mortgage loan, from the capital market;
- To create better and more effective standards and development of housing loan credit evaluation and loan administration, and to
help creating a more stabilised housing mortgage financing market.
Benefits to the Borrowers:
- Provide more opportunity to the borrowers to apply for housing loan with long-term fixed interest rate;
- Provide the borrowers more chance to have their own residences, since financial institutions will be able to lend more long-term
fixed rate loans to the borrowers;
- The borrowers will be able to effectively plan their expenses.