Proton Commerce is targeting a record year for loan disbursements and is looking at an all-time high of 20,000 disbursements for 2021.

Proton’s finance arm has seen its loan volume grow in line with the sales of Proton vehicles. In 2018, it disbursed 5,410 loans, which nearly doubled to 10,668 the following year. In 2020, despite disruptions caused by Covid-19 and loan moratoriums, Proton Commerce disbursed 14,189 loans.

The carmaker has started 2021 on a high note. Cumulative sales in the first quarter of 2021 were the highest since March 2012, and this strong showing has a knock-on effect for Proton Commerce.

“Although there was a downturn in many economic sectors caused by the Covid-19 pandemic, consumer sentiment for car purchases remains positive. Proton’s gains in product quality, its additions to the dealer network and the launch of new models have grown interest in its cars and we are seeing the results in the number of loan applications received,” said Mooi Fi Phang, CEO of Proton Commerce.

“Our loan disbursement volume for Q1 this year has increased by 42.3% and we are confident of our volume growing even more in Q2. However, the hire-purchase market could face a tough second half of the year as the Penjana sales tax incentive is scheduled to expire at the end of June, so the industry could see a period of correction as market demand finds its natural level,” he added.

Proton Commerce notes that it is seeing a change in the demographics of its customers, which are now younger. The company says that 80% of customers opt for nine-year hire-purchase financing plans and impaired loan rates are up to three times lower than the industry average.

“2020 was a tough year for the industry as financial institutions had to make modification loss provisions for the six-month moratorium programme announced by the central bank. Thankfully for Proton Commerce, the financial stability of our customer base meant a very low number of our borrowers opted for subsequent moratorium and with the removal of the provisions this year, we expect to contribute a healthy profit to our shareholders,” Mooi said.