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Three-quarters of Bangkok residents are in debt, says survey


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Three-quarters of Bangkok residents are in debt, says survey

By The Nation

 

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ABOUT 77.5 per cent of Bangkok residents are in debt and 53 per cent admit to have fallen behind in repayments, a survey by Bansomdej Poll in collaboration with the Foundation for Consumers (FFC)’s Chaladsue (Smart Buyer) magazine reveals.

 

The poll of 1,171 people conducted on August 24-28 found that out of the indebted respondents (most of whom had debts even before this year), 37.6 per cent were in debt for housing, followed by car payments (28.2 per cent), loans with illegal money-lenders (18.8 per cent) and loans with banks (17 per cent). 

 

The three most-cited loan sources were commercial banks (36.4 per cent), finance/leasing companies (16.7 per cent) and loan sharks (15.3 per cent), Bansomdej Poll executive Singh Singkhajorn told the press yesterday.

 

About 40 per cent of the indebted respondents owed under Bt100,000, while 30.6 per cent owed between Bt100,000-Bt500,000 and 17.4 per cent between Bt500,000-Bt1 million. Another 8.2 per cent owed between Bt1 million-Bt3 million, 2.7 per cent between Bt3 million-Bt5 million and 1.1 per cent owed more than Bt5 million. 

 

Some 53 per cent admitted to missing repayments, while 34.4 per cent said otherwise and 12.2 per cent were unsure. 

 

More than two-thirds (67.5 per cent) knew about the legal interest rate.

 

About 46 per cent had been subjected to communication regarding repayment (33.5 per cent via letters and 19.6 per cent via debt collectors’ rude verbal communication).

 

About 22.8 per cent of the in-debt respondents said they had been subject to lawsuits and asset seizure over unpaid overdue debts.

 

As for their awareness about the Thai government’s measures to aid the creditors, 40 per cent of the respondents said they knew about new loan sources such as The Bank of Thailand (BOT) Debt Clinic, the provincial-level “Pico Finance” loans under Finance Ministry’s supervision (to handle smaller cases and with loans not exceeding Bt50,000) and the BOT-supervised “Nano Finance” loans for vocational aid (to handle larger loans up to Bt100,000).

 

Slightly over half said they were interested in joining the Debt Clinic, while about a third were interested in the Pico Finance loans, the poll found. FFC secretary-general and Chaladsue magazine editor Saree Ongsomwang said Pico Finance and Nano Finance charged a high interest of up to 36 per cent per year, and therefore were not truly helping consumers. They urged the government to set the interest rate at 15 per cent per year to truly aid the people.

 

Narumon Mekborisut, chief of the foundation’s Consumer Rights Protection Centre, said Bangkok residents still didn’t have enough information to decide whether to partake in the government’s debt-tackling measures, including the Debt Clinic. Narumon cited Credit Card Debtors’ Club president Chuchat Boonyongyot’s comment in the magazine’s 209th edition (July 2018) that none had at the time passed strict criteria to use the Debt Clinic services. 

 

Narumon also cited the FFC report that from January 1 until September 30, a total of 392 complaints were filed about financial matters – 349 of which were about debts. Among the debt complainants, 106 owed to credit cards, 105 owed to leasing, 80 owed to normal loans and four owed to loan sharks. A total of 152 debtors faced legal actions, while 11 claimed to have been subjected to illegal methods of debt collection.

 

As many respondents were unaware of the Debt Collection Act, she urged the government to speedily pass criteria to control debt-collection fees. She also urged creating a committee to campaign about the law and to send a letter to the Royal Thai Police and the Provincial Administration Department to enforce the law.

 

Source: http://www.nationmultimedia.com/detail/national/30356139

 
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-- © Copyright The Nation 2018-10-10
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Thai people charge up the debts, till they are controllable, then complain?

 

Maybe the financial institutions should re-align the loan/charge amounts and not give credit so freely.

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"...Some 53 per cent admitted to missing repayments, while 34.4 per cent said otherwise and 12.2 per cent were unsure... 

About 46 per cent had been subjected to communication regarding repayment (33.5 per cent via letters and 19.6 per cent via debt collectors’ rude verbal communication).

About 22.8 per cent of the in-debt respondents said they had been subject to lawsuits and asset seizure over unpaid overdue debts..."

 

These figures seem to be quite high, but they desperately need some context; rather than simply asking what debts are owed, it is better to know what debt can or can't be re-paid, what assets they have already, etc. Put another way, if someone simply has a mortgage, then no big deal.

 

Nevertheless, the figures above, if accurate (a very big "if" considering polling in Thailand), should worry the hell out of government; it would be hard to achieve a sustainable economic run if consumer spending wasn't a key part of it.

 

Who keeps lending these people money? And why do people ask for/receive loans they can't re-pay?

 

While this likely has a complex answer, I'll add another black mark to the Thai education sector for their contribution...

 

 

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9 minutes ago, Samui Bodoh said:

"...Some 53 per cent admitted to missing repayments, while 34.4 per cent said otherwise and 12.2 per cent were unsure... 

About 46 per cent had been subjected to communication regarding repayment (33.5 per cent via letters and 19.6 per cent via debt collectors’ rude verbal communication).

About 22.8 per cent of the in-debt respondents said they had been subject to lawsuits and asset seizure over unpaid overdue debts..."

 

These figures seem to be quite high, but they desperately need some context; rather than simply asking what debts are owed, it is better to know what debt can or can't be re-paid. Put another way, if someone simply has a mortgage, then no big deal.

 

Nevertheless, the figures above, if accurate (a very big "if" considering polling in Thailand), should worry the hell out of government; it would be hard to achieve a sustainable economic run if consumer spending wasn't a key part of it.

 

Who keeps lending these people money? And why do people ask for/receive loans they can't re-pay?

 

While this likely has a complex answer, I'll add another black mark to the Thai education sector for their contribution...

 

 

Good points, especially in regard to the education angle.

 

It would also be interesting to see some profiling of income compared to debt and some details of what goods and services were bought to create the debts. 

 

 

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15.3% of about 10 million people borrow money from loan sharks. Wow!

How many loan sharks are necessary to service about 1,530,000 people?

It seems there must be thousands of loan sharks in Bangkok. And I thought that business is illegal?!

How about a crackdown on loan sharks? Or are the police scared to arrest too many influential people?

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35 minutes ago, scorecard said:

Good points, especially in regard to the education angle.

 

It would also be interesting to see some profiling of income compared to debt and some details of what goods and services were bought to create the debts. 

 

 

I guess most of the debts are for cars and property, but a lot of it is greed and trying to get rich quickly.

 

I was talking to a man just last night who borrowed 3 million to invest in the stock market. He thought he could get some quick profits and pay the money back. Now he is already down 10%. I wonder what he'll do. Borrow more?

 

Similarly, I knew another man who was offered a 30 million baht loan to build an apartment block. I can't say too much but the lender was a government official and he had already found the land. The whole budget was laid out and after about 9 months they were planning to sell for 60 million and share the profits. My "friend" got cold feet as there was a lot of corruption involved, but the project went ahead and was finished as planned.

 

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Debt is one thing. The ability to pay it back is key.

 

What is their debt vs income? What is term of these debts? What percent of income goes to paying these debts? 

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Ok, and I was wondering why so many new luxury cars on the roads these past few months..

 

But as another poster mentioned above, the important question is how much of the debt is manageable. It's different to live hand to mouth plus trying to repay a debt for car/luxury items and it's different having a good income and having to pay mortgages for propeties which you are renting out thus repaying themselves.

 

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What’s clear is Bangkok folk aren’t borrowing money for basic food or clothing , other than fancy restaurants and designer branded clothing ! It’s the typical Thai mindset,borrowing for image,a car a condo , dressing up and the latest gadgets ! House of cards will fall sooner or later, but the problems associated with Debt will continue ie Crime, domestic violence et al !

 

 

Sent from my iPhone using Thaivisa Connect

 

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4 hours ago, webfact said:

Some 53 per cent admitted to missing repayments, while 34.4 per cent said otherwise and 12.2 per cent were unsure. 

Huh ? 12% of people did not know if they had missed a payment ? No wonder they are in so much debt.  

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No problem at all. Go the American way, and with Draghi also the European now. Just print trillions of baht, lend out for free, let the economy grow, prices and wages will rise and let the resulting inflation deflate the value of the debts. The western economic house of cards model.

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9 minutes ago, SoilSpoil said:

No problem at all. Go the American way, and with Draghi also the European now. Just print trillions of baht, lend out for free, let the economy grow, prices and wages will rise and let the resulting inflation deflate the value of the debts. The western economic house of cards model.

Oh yah ! as soon as possible so euro , US dollars and pound will come back to what they were twelve years ago ..

I remember 1 euro = 53 baht 

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5 hours ago, webfact said:

FFC secretary-general and Chaladsue magazine editor Saree Ongsomwang said Pico Finance and Nano Finance charged a high interest of up to 36 per cent per year, and therefore were not truly helping consumers. They urged the government to set the interest rate at 15 per cent per year to truly aid the people.

Up to 36% interest being charged by organisations that are under the Finance Ministry's supervision to aid these people in debt. Sound like officially sanctioned loan sharks to me.

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Nationwide personal debt is a major issue for Thailand. As life in Thailand gets more expensive it becomes an even bigger issue. 

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Long time experience taught me not to put much stock in any figures the government releases to the public, and only believe in half of what they're saying, mainly because that everything they say is either incorrect, doesn't make sense or has a hidden agenda behind that, now if only i knew which half of the information i should believe in...

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2 hours ago, OneMoreFarang said:

How about a crackdown on loan sharks?

Been there, done that.

December 2016: Nationwide crackdown on Thailand’s largest loan shark gang

http://annx.asianews.network/content/nationwide-crackdown-thailand’s-largest-loan-shark-gang-35870

September 2017: Crackdown on major loan shark operations

http://www.nationmultimedia.com/detail/national/30326812

May 2018: Ministry, cops launch loan shark blitz
https://noovell.com/similar/9386512/

 

 

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7 hours ago, webfact said:

Some 53 per cent admitted to missing repayments, while 34.4 per cent said otherwise and 12.2 per cent were unsure. 

How can you be unsure you have missed a payment. 

 

You either have or haven't. 

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4 hours ago, scorecard said:

Good points, especially in regard to the education angle.

 

It would also be interesting to see some profiling of income compared to debt and some details of what goods and services were bought to create the debts. 

 

 

Oh yes, education is to blame.

What about common sense?

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That's a new crisis in making....

 

What will happen if they can't pay for their houseloans any more? The banks will start falling, good that they get so many Brits with 800k on the bank.😁

 

Strange that the baht can be so strong with this sword above the market.

 

 

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1 hour ago, Srikcir said:
4 hours ago, OneMoreFarang said:

How about a crackdown on loan sharks?

Been there, done that.

December 2016: Nationwide crackdown on Thailand’s largest loan shark gang

http://annx.asianews.network/content/nationwide-crackdown-thailand’s-largest-loan-shark-gang-35870

September 2017: Crackdown on major loan shark operations

http://www.nationmultimedia.com/detail/national/30326812

May 2018: Ministry, cops launch loan shark blitz
https://noovell.com/similar/9386512/

Does this mean that now all the people who borrowed from loan sharks don't have to pay back any money because these loan sharks are now in jail?

Or did the police overlook a couple of them? Or more likely they overlooked 99%.

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Stupid and ignorant people will always be taken advantage of.

If people were aware and alert, we wouldn't allow the owners of central banks to control everything worldwide with their unsound currencies based on growth of debt.

There is a sucker born every minute.

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5 hours ago, OneMoreFarang said:

15.3% of about 10 million people borrow money from loan sharks. Wow!

How many loan sharks are necessary to service about 1,530,000 people?

It seems there must be thousands of loan sharks in Bangkok. And I thought that business is illegal?!

How about a crackdown on loan sharks? Or are the police scared to arrest too many influential people?

Already been at least 10,000 crack downs on loan sharks in the last 30+ years that I'm aware of.

 

Successful crack downs? No and no and no...

 

 

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