maerim Posted June 27, 2004 Share Posted June 27, 2004 Yesterday on the front Page of Thai Rath was a tasteful photograph of a husband and wife who had commited suicide because of their debt commitments. About lunchtime we heard of a chap who had been found haging from tree not far from here for the same reason or more to the point his inability to repay his debts. He was about 40 years old and leaves a wife and small son. Over the last few years I have seen ordinary Thai's debt level soaring I was talking to a lady last week about her new car 1,400,000 bahts worth there is no way on this earth she can keep up the repayments on this vehicle and she is just one. My missus was pestered by the bank to get a credit card or ten she said it's OK as I use his (mine) so the bank employees are on commission to get people into debt. One of my relations, he has a responsible job moved away from Bkk and I asked what became of his house did he let it or sell it? Niether it was repossessed by the bank the same as the other 50% of the properties on the estate it doesn't seem to bother him one way or the other. It would bother me as in the UK if you default on a mortgage you can forget about home ownership for 12 years. The question I pose is this when is it crunch time for Thailand? As everyone must sooner or later pay their debts same as companies do and even countries look at Argentina a few years ago, surely this can't go on indefinately, can it? Link to comment Share on other sites More sharing options...
chokrai Posted June 27, 2004 Share Posted June 27, 2004 My wife is a teacher here in maerim and i am amazed by how deeply most of her friends are in debt. They borrow money from the teachers union and when they get it spend it on taking all their friends out to party! The latest thing is a pyramid scheme which they are all getting into. I am lucky because my wife hates gambling and wont even buy a lotto ticket. I really dont know how they make ends meet with most of their paycheck going to pay back the bank. Link to comment Share on other sites More sharing options...
KevinN Posted June 27, 2004 Share Posted June 27, 2004 My wife is a teacher here in maerim and i am amazed by how deeply most of her friends are in debt. They borrow money from the teachers union and when they get it spend it on taking all their friends out to party! The latest thing is a pyramid scheme which they are all getting into. I am lucky because my wife hates gambling and wont even buy a lotto ticket. I really dont know how they make ends meet with most of their paycheck going to pay back the bank. My wife is also a teacher,and she is some kind of a treasurer for the school,she gets the money deposited in KRUNG bank and pays the bills and does the ordering of supplies. She also has a personal acct. there and they sent her a VISA card,she never uses it,and I told her to just forget about it and maybe cut it up. We use my US credit cards if she needs something and doesn't have the cash and we pay the bills online to my accounts in the states. I can see where a lot of the teachers are getting in deep debt,most seem to think that they need 4X4 "OFFROAD" pickups to drive to school, my wife drives a Honda Civic and never has a need for 4 wheel drive as the snow and ice are never a problem where we live,I don't know about the other folks. In the states I had a Honda Civic 4 WD wagon because some mornings you would wake to 2 feet of fresh snow and I lived out in the country,20 miles to town and had to take my daughter to school. I can't see where the Thai think that they can pay for all the things,new homes,cars that they do not need,and all other stuff that is readily available on time payments,,I notice that the total price of a car is rarely listed,just the down and monthly payments,,seems very strange to me.Like a bunch of kids. Link to comment Share on other sites More sharing options...
chingy_ Posted June 27, 2004 Share Posted June 27, 2004 over the last decade of so the stated have teach the teenage and adult how to becareful about credit card, personal credit, loan, and etc..etc..etc.., now aday people in the stated are more careful about there credit and loan, they see what result it lead to with bad debt, Thai people also need those kind of education, for them this is just the beginning, they havent reach the mature level as yet. Link to comment Share on other sites More sharing options...
KevinN Posted June 27, 2004 Share Posted June 27, 2004 Maybe we should start a poll on how much some drink before posting,I think it would be an informative and educational poll, as well as a fun thing to do. Link to comment Share on other sites More sharing options...
Johpa Posted June 27, 2004 Share Posted June 27, 2004 My wife is a teacher here in maerim and i am amazed by how deeply most of her friends are in debt. They borrow money from the teachers union and when they get it spend it on taking all their friends out to party! The latest thing is a pyramid scheme which they are all getting into. Let us hope that she was not one of the teachers in Mae Rim several years ago who purchased land out in Sankhampeng to which, in the end, there were no legitimate title deeds, as did my brother-in-law and his pals. Since teachers have a constant source of income they seem to always be targets for financial schemes Link to comment Share on other sites More sharing options...
issan2 Posted June 27, 2004 Share Posted June 27, 2004 A local shop owner in our nearest town has borrowed hundreds of thousands of baht from many local people, my wife included. She has bought a new pick up and sent her children to very good schools with the money. However, when asked to return the the sum that she borrowed from my wife, 40k baht, no chance. It turns out that she's spent every thing and has no chance of paying all her creditor's. It even transpired that she cant pay the rent on the shop or the payments on the car now. But her latest idea is to borrow the money from the government. Apparently a new scheme exists where people who are deeply in dept can apply to borrow the money from the government at very low rates. This is not the same as the 1M baht scheme per village its a new one. It just seems like a crazy world, rob peter to pay paul, without thinking about the future or the consequences. Link to comment Share on other sites More sharing options...
john b good Posted June 27, 2004 Share Posted June 27, 2004 This is a trait that is very evident in many Thais. If you can get something on the "never never" go for it. For those innocent ones I say OK "they know not what they do" (what they are letting themselves into) For those who know the score and when they cannot pay and top themselves I say "som nam naa" Anyone who is bringing their sob story to me is talking to someone whe really doesn't give a sh*t. I fully understand and appreciate that people want to aquire some of these commodities but if they can't afford them "they can't afford them" The average "joe" Thai cannot handle money, they want to have what they cannot afford. There were (in 1997), 50 something out of 50 something Thai finance companies that folded because people could not/would not honour their debt's. (only one company survived) Today in 2004 nothing has changed. Link to comment Share on other sites More sharing options...
stroll Posted June 27, 2004 Share Posted June 27, 2004 I'd say this phenomenon is a result of 'modern' values taking root in this part of the world. Seeing how many Western countries have been running on the principle of spiralling debts, the lure of instant gratification from advertising combined with a gambling mentality and lack of foresight makes one want it all now and hoping for some miracle to occur later on. Consumerism at its worst. Looking at the living standard of characters in tv-soaps, and seeing the neighbours of similar income as oneself load their new pickup, made possible by the local bank and misuse of wellintended government schemes, many think the are entitled to the same. Understandable this becomes epidemic, who can blame them? Link to comment Share on other sites More sharing options...
DogNo1 Posted June 27, 2004 Share Posted June 27, 2004 Obviously you are correct. Corruption and the misuse of money are new phenomena in Asia, recently introduced by the West. Link to comment Share on other sites More sharing options...
maerim Posted June 27, 2004 Author Share Posted June 27, 2004 Obviously you are correct. Corruption and the misuse of money are new phenomena in Asia, recently introduced by the West West is best I don't think so, but the rampant advertising here aimed at people with little or no disposable income is despicable. Thet say have it now, why wait? I have been informed on here that there is no central register of bad debts here in Thailand perhaps there is not but there is certainly a register of bad debts on the underground loan sharks. In the West it's just bad news for the lenders if borrowers default here when they do it's a trip to the hospital or worse. Link to comment Share on other sites More sharing options...
DogNo1 Posted June 27, 2004 Share Posted June 27, 2004 In Japan, 97 people commit suicide every day, many due to money related problems. Loan-sharking here is a vicious business and once borrowers turn to loan sharks, they are as doomed as insects in a spider's web. Loan sharking here is often connected to the Yakuza, a mafia-like group whose existence predates that of America by a thousand years. Still think that Asia's money problems are learned from the West? Link to comment Share on other sites More sharing options...
phazey Posted June 27, 2004 Share Posted June 27, 2004 One thing i've known for a good few years, and luckily drilled into my wife since we have been married ("oh but we can borrow the money babe!") is that, "if we cant afford it, we don't buy it" saying that, such a nice heart she has, now people owe her (/me fumes) but i guess thats the thai way. Link to comment Share on other sites More sharing options...
maerim Posted June 27, 2004 Author Share Posted June 27, 2004 Still think that Asia's money problems are learned from the West? No I don't but I still think that the advertising business have a lot to answer for, same as in the West making people want things and persuading them that they need them there is a difference you know. Link to comment Share on other sites More sharing options...
Crash999 Posted June 27, 2004 Share Posted June 27, 2004 One has to wonder how much of the current economic boom is fueled by consumer debt. Lots of mobile phones, motorcycles, houses, and condos being bought on credit... but what happens when everyone has to pay it back. Will be lots of bargains for those of us holding onto cash. Read an article recently that was talking about the debt problem in Korea- seems like Thailand could easily head in that direction if things aren't kept in check. Link to comment Share on other sites More sharing options...
chanchao Posted June 28, 2004 Share Posted June 28, 2004 ... most seem to think that they need 4X4 "OFFROAD" pickups to drive to school, my wife drives a Honda Civic and never has a need for 4 wheel drive ... Keep in mind that 4x4 pickups are cheaper than Honda Civics in this country. Also they tend to do 15 kms per one liter of diesel. And speaking of diesel.. Civics eat fuel that currently goes for a whopping 19.43 baht (upcountry). 4x4 pickups eat fuel that costs 15.23 baht (upcountry). That's over 4 baht difference at the moment.. Over 250 baht saved every time you fill up. And finally, pick-ups last longer than Civics and seem to keep their value like a house. Getting back on topic, I do agree that debts and loan sharking are a serious problem. I can never understand why someone making 16,000 baht a month would choose to live in a shitty little room but be willing to pay 12,000 baht monthly for 6 years just to have a Honda Civic (or similarly priced car) parked in front or semi-parked in a traffic jam. Cheers, Chanchao Link to comment Share on other sites More sharing options...
chingy_ Posted June 28, 2004 Share Posted June 28, 2004 One has to wonder how much of the current economic boom is fueled by consumer debt. Lots of mobile phones, motorcycles, houses, and condos being bought on credit... but what happens when everyone has to pay it back. Will be lots of bargains for those of us holding onto cash. Crash im with you there, im stacking up my baht right now, drive around the city looking for my dream home, and sit back relax until that day to come. the thing i see is where does the Thai get their money from, not from selling rice, all this economy booming, but where did the money come from. Link to comment Share on other sites More sharing options...
maerim Posted June 28, 2004 Author Share Posted June 28, 2004 Crash im with you there, im stacking up my baht right now, drive around the city looking for my dream home, and sit back relax until that day to come. I wouldn't hold my breath if I were you. In Chiang Mai alone there must be thousands upon thousands of empty properties that have been repossesed by the banks and have been empty for many years. Some of these properties have never been occupied just built and left. The problem here is that distressed purchases such as these where in the West they would get whatever they could for them the finacial institutions want what they origianally lent years ago. So they are sitting on mountains of bad debts or NPL non performing loans. Yet new housing projects are being thrown up all over the place so you will have e new estate full for a year or so then the banks will reposses and the whole cycle will start again. Link to comment Share on other sites More sharing options...
NedKelly Posted June 28, 2004 Share Posted June 28, 2004 Its a weird world (the Thai world).........all of my neighbours have big houses, nice cars, mobile phones, ubc etc ........ but they still do their clothes washing by hand in a big plastic bucket at the front step. Link to comment Share on other sites More sharing options...
HinHam Posted June 28, 2004 Share Posted June 28, 2004 May I say what an excellent subject matter and excellent posts to back it up. Yes I too am amazed at the level of spending by Thai and Foriegners, house prices are/is getting rediculous, it will end in tears very soon. Always laugh when touring, stop at a village and have a chat with the locals, sooner or later a woman will come out of a corrugated iron shack wearing a 3 b gold neckless. Amazing Thailand Link to comment Share on other sites More sharing options...
somtaamgaiyang Posted June 28, 2004 Share Posted June 28, 2004 Until this country has a bankruptcy law that is truly enforceable and a claims court(uncorruptable) where you can effectively get your money back, the chances that you will suffer irrevocably from debt are very slim. People are not afraid of debt because experience has shown them that it is very difficult for a bank to foreclose on them. The level of regulation of the personal banking business here is almost non-existant. There is no credit checking agency to see if people should be able to borrow the money. There is very little chance that someone will ever have to pay the debts that they incur. More likely to lose an asset in exchange for paying the debt. It is fraught with danger. Then mix it together with a good dose of low interest rates (thankyou the FED) and a populace that has finally got itself back on its feet financially, a populist government run by a man who wants to make people feel financially powerful and you have the perfect situation for a credit boom and potential bust. How can it be possible to be giving credit cards to people with salaries as low as 15,000 bht per month, and yet the companies are allowed to do it. My wife's uncle just borrowed 900,000 with zero downpayment with a term of 25 years. He is 51 years old and I am very happy that he is able to get a new property to live in. By for godsake, how is he every going to pay this off. He is going to retire in 14 years maximum and then who will pay? The next generation no doubt. If his salary is one cent more than 20,000 bht i will be surprised. How a bank can be allowed to provide credit cards/loans to people with earnings of 15,000 bht minimum I cannot understand. These people have no slack in the system should interest rates even go up 0.125%. I fear very much for the future of this country. I love this country and it's people so much and I do not want to see another 1997 all over again. Maybe the timing is on their side vis a vis US interest rates and the debt is mainly incurred on Thai denominated credit cards, as opposed to US denominated loans, but when I see people shopping in Big C with 20 credit cards in a folder and they are patently borrowing from one to pay the other something is wrong. It only takes a small breath to bring down a house of playing cards. Link to comment Share on other sites More sharing options...
HinHam Posted June 28, 2004 Share Posted June 28, 2004 My wife's uncle just borrowed 900,000 with zero downpayment with a term of 25 years. He is 51 years old and I am very happy that he is able to get a new property to live in. By for godsake, how is he every going to pay this off. He is going to retire in 14 years maximum and then who will pay? The next generation no doubt. If his salary is one cent more than 20,000 bht i will be surprised. You will or his daughter who will get it from a stupid foriegner. 1997, yes let it happen again, good for us, the baht will half in value, I have been waiting now for a year, another 18mths and we will see. Cash is King. Link to comment Share on other sites More sharing options...
somtaamgaiyang Posted June 28, 2004 Share Posted June 28, 2004 The debt has and will have nothing to do with me. We can all wish for the baht to plummet so that our $s will go further. I for one don't. It will be the poor who suffer once again, whilst the rich will not even notice. Link to comment Share on other sites More sharing options...
hkthai Posted June 28, 2004 Share Posted June 28, 2004 My wife's uncle just borrowed 900,000 with zero downpayment with a term of 25 years. He is 51 years old and I am very happy that he is able to get a new property to live in. By for godsake, how is he every going to pay this off. He is going to retire in 14 years maximum and then who will pay? The next generation no doubt. If his salary is one cent more than 20,000 bht i will be surprised. Most property lending institutions have stipulation on property loan that allows terms up to 25 years but the sum of the terms and age of the borrower should not exceed 65 years of age. Is it a case of the bank overlooking his age? Did he have a contact within the institution? Sure would like to know the institution where he received the loan. Link to comment Share on other sites More sharing options...
maerim Posted June 28, 2004 Author Share Posted June 28, 2004 It will be the poor who suffer once again, whilst the rich will not even notice. I am in full agreement with you on this point. What has happened over the last few years is that people who have not a chance of paying these debts have been loaned money, given credit cards etc and been encouraged by the banks to overextend themselves with massive debt So sooner or later the bubble must burst then watch the brown stuff hit the fan. Link to comment Share on other sites More sharing options...
somtaamgaiyang Posted June 29, 2004 Share Posted June 29, 2004 As for the house loan. He is a policeman. It probably helped to smooth the way as they would say Link to comment Share on other sites More sharing options...
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