Overall Thai household debt remains at a high level: BOT

[webfact]

Overall Thai household debt remains at a high level: BOT

 

   

BANGKOK, (NNT)-A study by the Bank of Thailand (BOT) has found that overall Thai household debt is still high. Government agencies are advised to maintain a policy to strictly supervise financial institutions’ lending, and provide information and an understanding of financial planning to people.

 

Mrs. Soamrasat Chantharat, Head of Research Group, Puey Ungphakorn Economic Research Institute, BOT, disclosed today that the study of Thai household debt using the credit bureau’s information on loan arrangements for the nine years from 2009-2018, showed that the proportion of household debt owed to large commercial banks and state-owned specialized financial institutions, had continually declined, in contrast to the increase in the growth of debt owed to medium-sized commercial banks and non-financial institutional service providers or nonbanks.

 

Most loan applications were submitted by existing borrowers. Only one-fifth of loans were granted to new borrowers. Most of them were car loans, home loans, motorcycle loans and personal loans.

 

Existing borrowers were found to have increased the amounts of new loans, with multiple accounts with many financial institutions, especially unsecured loans which often have a deteriorated credit quality, with the number growing constantly, together with a concentration of debts and some types of non-performing loans in the market which is highly competitive, such as housing loans and personal loans in Bangkok and its vicinity and large city areas.

 

A study found that Thai household debt had an apparent faster growth rate than the country’s economic growth in 2018, with the household debt ratio at 78.6 percent, which is among the top three countries with the highest household debt in Asia. This directly affects overall economic expansion.

 

The government sector works continually to resolve the household debt problem by promoting financial knowledge, issuing measures to regulate credit card and personal loans under the supervision of the BOT, and establish debt relief clinics for people to study and truly understand the major causes of debt from spending more money than they earn, especially non-essential spending, purchasing goods beyond their financial level, and a lack of an appropriate long-term financial plan.

 

 

-- © Copyright nnt 2019-05-02

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[connda]

7 hours ago, webfact said:

A study by the Bank of Thailand (BOT) has found that overall Thai household debt is still high.

And why would it go down.  Banks profit from debt trapped consumers: pay next to nothing for deposits while charging usurious rates on loans which can be multiplied by fractional reserve banking.  No downside to the banks and lenders until the ponzi scheme collapses and then they simple take depositor's money and taxpayer's money to make themselves whole again.  Then, bonuses for the executives; contributions to politicians.

[DrTuner]

In the last few months members of extended family have finally wisened up and sold their secondary cars they don't use. Citing not being able to pay for the installments anymore. I suppose they gained all the face when buying and then it's just a burden. The question is will they now go and buy another one for another booster shot. 

[ThaiBunny]

2 minutes ago, DrTuner said:

In the last few months members of extended family have finally wizened up 

Have they tried botox?

[DrTuner]

5 minutes ago, ThaiBunny said:

Have they tried botox?

Thank Chrome's spellchecker for that correction. Or maybe I've been watching too many episodes of Z World.

 

As a side note, I always wondered where grammar nazies came from, until I found Brits have grammar schools. All clear now.

[RotBenz8888]

8 hours ago, webfact said:

promoting financial knowledge

Heres shocking news: You have to pay back your loans!

[mommysboy]

14 minutes ago, RotBenz8888 said:

Heres shocking news: You have to pay back your loans!

Not just about imprudence though- salaries stagnating and even falling, while the cost of living is increasing.  Same problem in UK.  It's becoming a real problem because even families in steady work are falling in to the poverty trap.

[Srikcir]

10 hours ago, webfact said:

in contrast to the increase in the growth of debt owed to medium-sized commercial banks and non-financial institutional service providers or nonbanks.

In contrast not a good thing as such high interest rate sources obviously continue to exist to prey on low-income citizens.

10 hours ago, webfact said:

The government sector works continually to resolve the household debt problem

And the results of a five-year Prayut government:

10 hours ago, webfact said:

Thai household debt had an apparent faster growth rate than the country’s economic growth in 2018, with the household debt ratio at 78.6 percent, which is among the top three countries with the highest household debt in Asia.

AKA 'failure.'

[Srikcir]

10 hours ago, webfact said:

The government sector works continually to resolve the household debt problem

Let's not forget Prayut's 'victory dance' in 2017:

PM satisfied with progress in addressing unregulated debt problem 

http://englishnews.thaipbs.or.th/pm-satisfied-progress-addressing-unregulated-debt-problem/

The problem-solving lesson Prayut gave to farmers (my italic emphasis & partial paraphrase):

• farmers who have taken out loans from the Bank for Agriculture and Agricultural Cooperatives, the bank will reconstruct the debts for more than 35 thousand farmers who are members of the Sustainable Farmers’ Reconstruction and Development Fund. 
• borrowers who have failed to pay their debts since 31st December 2017 with a debt not exceeding 2.5 million baht each will be allowed payment suspension for half of the principal and the whole interest. 
• the ministry will discuss with the farmers in debt to other banks and the banks ways to help them in a manner similar to the case of BAAC debtors.

https://www.thaivisa.com/forum/topic/1062418-gov-directs-problem-solving-for-agriculturists%E2%80%99-debts/?utm_source=newsletter-20181014-1003&utm_medium=emai

Seems 'going backwards' is a solution.