Thai Household Debts Nearly Double In Seven Years

[george]

Thai household debts nearly double in seven years

BANGKOK: -- Thailand's household indebtedness rose to an average Bt116,681 (US$3,700) per family last year from Bt68,405 (US$2166) in 2000, almost double, according to Thailand's National Statistical Office (NSO).

The increase was attributed to several factors, ranging from low interest rates and an increase in personal loans offered by financial institutions.

However, debts for consumption comprised about 60 per cent of total household debts.

According to the National Statistical Office, debts against average income per household increased to 5.6 times in 2004 and slipped to 6.6 and 6.3 times in 2006 and 2007 respectively.

Household debts during the period totaled 16 per cent of total assets, still lower than a number of countries. In the US, Columbia and the Czech Republic household debts stood at 30, 18 and 27 per cent respectively.

At the end of 2007, non-performing loans (NPLs) for private consumption taken at financial institutions stood at 4.1 per cent, down from 4.8 per cent from one year ago, and was considered still low when compared to 7.3 per cent of total NPLs in every business sector.

Despite the sharp increase in household debts in 2007, the Bank of Thailand said the majority of the debts resulted from purchases of movable property or fluid capital and they were still "within manageable" limits and that the problem was not serious.

Most of such debts were seen in low income families with low education which depended on loans outside the legal system, the central bank said.

--TNA 2008-04-15

[bingobongo]

those who are stupid with their money deserve to be separated from it, it is the best way to learn financial responsibility

[Tony Clifton]

My neighbour had bought a Toyota, sold it after a year as he has 3 kids and a wife to support on a factory job and couldn't hardly keep up with the payments. He bought a brand new scooter, later on sold the Toyota. Very next day, the kid split his head open after falling from the balcony. Raining hard, he knocked on our door for help and needed a ride to the hospital, we weren't there so he had to knock on quite a few doors up and down the street to get help.

He just bought a fairly new BMW but will remove the engine and replace it with a Toyota engine to save on fuel. Obviously he hasn't thought of depreciation when he fails with the payments again and needs to resell the car with a modified engine.

I think he also fell from the balcony as a youngster.

[onnut]

My neighbour had bought a Toyota, sold it after a year as he has 3 kids and a wife to support on a factory job and couldn't hardly keep up with the payments. He bought a brand new scooter, later on sold the Toyota. Very next day, the kid split his head open after falling from the balcony. Raining hard, he knocked on our door for help and needed a ride to the hospital, we weren't there so he had to knock on quite a few doors up and down the street to get help.

He just bought a fairly new BMW but will remove the engine and replace it with a Toyota engine to save on fuel. Obviously he hasn't thought of depreciation when he fails with the payments again and needs to resell the car with a modified engine.

I think he also fell from the balcony as a youngster.

I wondered why there was these guys driving around slowly in these big BMWs. is that what they do? buy a performance car, pull the engine out and replace it with something cheaper to run.

[Johpa]

those who are stupid with their money deserve to be separated from it, it is the best way to learn financial responsibility

No, the best way to learn financial responsibility is to teach basic finances to young people in school. Knowingly giving out loans to people who clearly should not be taking on that debt is the irresponsible behavior.

[Heng]

those who are stupid with their money deserve to be separated from it, it is the best way to learn financial responsibility

No, the best way to learn financial responsibility is to teach basic finances to young people in school. Knowingly giving out loans to people who clearly should not be taking on that debt is the irresponsible behavior.

No, the best way to learn financial responsibility is to teach basic finances to young people at home. To knowingly pass the buck (or Baht) to the public/gov't school system and then the banking system is irresponsible behavior.

As most know, there are plenty (IMO there should be more) of hoops and checks in the financial system nowadays. People determined to live beyond their means still continue to do whatever it takes to jump through those hoops and checks. What the system can't screen out is stupidity.

[nickynomates]

I agree teach the kids at school.

If they are not talking into the new phone they just got.

Face = Borrowing.

Borrowing + loan shark = Trouble.

Not paying loan shark = Change of name and address and working as a lady boy for a few years.

[Heng]

I agree teach the kids at school.

The ones that learn it at school end up 'borrowing from' or 'working for' the kids who learned it at home.

[Ijustwannateach]

those who are stupid with their money deserve to be separated from it, it is the best way to learn financial responsibility

No, the best way to learn financial responsibility is to teach basic finances to young people in school. Knowingly giving out loans to people who clearly should not be taking on that debt is the irresponsible behavior.

No, the best way to learn financial responsibility is to teach basic finances to young people at home. To knowingly pass the buck (or Baht) to the public/gov't school system and then the banking system is irresponsible behavior.

As most know, there are plenty (IMO there should be more) of hoops and checks in the financial system nowadays. People determined to live beyond their means still continue to do whatever it takes to jump through those hoops and checks. What the system can't screen out is stupidity.

Of course, 'the system' is the part that lends legally, and which has screening.

There is, I have heard, another part which isn't in 'the system,' which possibly isn't quite as ethical.

"S"

[Heng]

those who are stupid with their money deserve to be separated from it, it is the best way to learn financial responsibility

No, the best way to learn financial responsibility is to teach basic finances to young people in school. Knowingly giving out loans to people who clearly should not be taking on that debt is the irresponsible behavior.

No, the best way to learn financial responsibility is to teach basic finances to young people at home. To knowingly pass the buck (or Baht) to the public/gov't school system and then the banking system is irresponsible behavior.

As most know, there are plenty (IMO there should be more) of hoops and checks in the financial system nowadays. People determined to live beyond their means still continue to do whatever it takes to jump through those hoops and checks. What the system can't screen out is stupidity.

Of course, 'the system' is the part that lends legally, and which has screening.

There is, I have heard, another part which isn't in 'the system,' which possibly isn't quite as ethical.

"S"

The illegal lending/finance system is indeed long overdue for a crackdown (on par with a narcotics type crackdown if need be).

[tijnebijn]

I agree teach the kids at school.

If they are not talking into the new phone they just got.

Face = Borrowing.

Borrowing + loan shark = Trouble.

Not paying loan shark = Change of name and address and working as a lady boy for a few years.

Oh man !

[plachon]

those who are stupid with their money deserve to be separated from it, it is the best way to learn financial responsibility

No, the best way to learn financial responsibility is to teach basic finances to young people in school. Knowingly giving out loans to people who clearly should not be taking on that debt is the irresponsible behavior.

No, the best way to learn financial responsibility is to teach basic finances to young people at home. To knowingly pass the buck (or Baht) to the public/gov't school system and then the banking system is irresponsible behavior.

As most know, there are plenty (IMO there should be more) of hoops and checks in the financial system nowadays. People determined to live beyond their means still continue to do whatever it takes to jump through those hoops and checks. What the system can't screen out is stupidity.

Of course, 'the system' is the part that lends legally, and which has screening.

There is, I have heard, another part which isn't in 'the system,' which possibly isn't quite as ethical.

"S"

The illegal lending/finance system is indeed long overdue for a crackdown (on par with a narcotics type crackdown if need be).

Isn't that tempting fate Heng matey?

Or are you out of the loan shark business these days?

By the way, on the system not being able to "screen out stupidity", I would have thought in the case of Thailand, the "system", (such as it is), positively thrives on the stupidity and ignorance of the masses to be exploited for their own ends. And the purveyor par excellence of this and bled it up to the hilt was none other than Toxin. He pushed the notion that debt is good, nay essential, for domestic economic growth and through all his policies from One Million Baht Fund to easing up credit through banks pushed it to the hilt. He said get in debt for cars, bikes, mobile phones (esp HIS own), education, etc., was the way to wealth and the people lapped up his poisoned medicine. Hence, the debt bubble the Thai people find themselves in now, yet they fail to see the architect of their misery, which is the huge paradox of Thailand today. The Toxin pied piper was the one that led them down the road to their own mess of today, yet still they idolise the guy. It's a crying shame, but one day they'll have to wake up to the reality.

[bingobongo]

those who are stupid with their money deserve to be separated from it, it is the best way to learn financial responsibility

No, the best way to learn financial responsibility is to teach basic finances to young people in school. Knowingly giving out loans to people who clearly should not be taking on that debt is the irresponsible behavior.

so blame the lenders because adults are too stupid to think past today? give me a break

borrowers need to take responsibilty as well

[rgs2001uk]

i guess being tan samay may aint cheap these days.

reading this thread got me confused, didnt know if i was on a thai website or an american one.

[rgs2001uk]

the cost of face just keeps getting more expensive for those who can afford it the least, still they can console themselves with the fact they are tan samay may.

reading this thread got me confused, didnt know if i was on a thai website or an american one.

[Heng]

those who are stupid with their money deserve to be separated from it, it is the best way to learn financial responsibility

No, the best way to learn financial responsibility is to teach basic finances to young people in school. Knowingly giving out loans to people who clearly should not be taking on that debt is the irresponsible behavior.

No, the best way to learn financial responsibility is to teach basic finances to young people at home. To knowingly pass the buck (or Baht) to the public/gov't school system and then the banking system is irresponsible behavior.

As most know, there are plenty (IMO there should be more) of hoops and checks in the financial system nowadays. People determined to live beyond their means still continue to do whatever it takes to jump through those hoops and checks. What the system can't screen out is stupidity.

Of course, 'the system' is the part that lends legally, and which has screening.

There is, I have heard, another part which isn't in 'the system,' which possibly isn't quite as ethical.

"S"

The illegal lending/finance system is indeed long overdue for a crackdown (on par with a narcotics type crackdown if need be).

Isn't that tempting fate Heng matey?

Or are you out of the loan shark business these days?

By the way, on the system not being able to "screen out stupidity", I would have thought in the case of Thailand, the "system", (such as it is), positively thrives on the stupidity and ignorance of the masses to be exploited for their own ends. And the purveyor par excellence of this and bled it up to the hilt was none other than Toxin. He pushed the notion that debt is good, nay essential, for domestic economic growth and through all his policies from One Million Baht Fund to easing up credit through banks pushed it to the hilt. He said get in debt for cars, bikes, mobile phones (esp HIS own), education, etc., was the way to wealth and the people lapped up his poisoned medicine. Hence, the debt bubble the Thai people find themselves in now, yet they fail to see the architect of their misery, which is the huge paradox of Thailand today. The Toxin pied piper was the one that led them down the road to their own mess of today, yet still they idolise the guy. It's a crying shame, but one day they'll have to wake up to the reality.

Not at all, Plachon sport. We're licensed and not a part of the underground system... although the whingers at worst try to lump us in with the loan sharks and at best collectively blame us and the banks and finance companies for the less than intelligent budgeting and fund allocation decisions of debtors.

Education in the home would have made Thaksin's one million Baht fund and easy credit policies an opportunity for the poor instead of yet another opportunity to exercise poor (zero or negative return on investment) choices in spending as you mentioned above.

[Seneque]

the majority of the debts resulted from purchases of movable property or fluid capital and they were still "within manageable" limits and that the problem was not serious.

Most of such debts were seen in low income families with low education which depended on loans outside the legal system, the central bank said.

So if the government says it is not serious ... why worry !

And of course it is not serious because most debts are in the low income families brackets !

Land of smiles ... land of debts .... Gosh, I wish I could be as 'my pen rai' as them ... remember the song, ''be happy, don't worry'' ...

[distortedlink]

There is me, my wife and daughter.

We lived in Chiang Mai from 1994 to the end of 1995. Than from 2003 and still here.

I have kept up our income and expenditure records for over 20 years.

Over the last 13 years the parts of it that we actually lived in Thailand, our lifestyles have not changed very much except that we rented an apartment and now own our house, well my wife does anyway. Still eat about the same, use the same amount of water, electricity and gas etc.

Back in 1994/95 my cost of living here was 8000 baht per month. This included social, daughter's education, clothing, medical and all the rest of it.

These days, I have had to cut out most of our social, too expensive, my daughter no longer goes to school she has graduated, no longer use air con only fans, cut out soft drinks, drink mostly water, stopped smoking, have motorbike no car, not paying rent, the house my wife owns and now our cost of living has reached an average of 27000 baht per month. Although on this amount we are not suffering, but certainly not living the high life.

The frightening part is, who knows what the cost of living is going to be in the next ten years.

To be honest every time I purchase anything in a store or supermarket, I always think that there is some big fat guy smoking a cigar seating behind a desk, raking in the benefits of my hard earned dosh.

Edited April 20, 2008 by distortedlink

[howtoescape]

I have always been generous with my money with my friends, though i never used to like to lend them money.

There is one ex-friend imperticular who was always borrowing off people and they may have got this money back, but only after chasing him.

Now one time when he came begging to me i gave in and lent him a small sum, which i never got to see again.

Now IMO it is my stupid fault for lending someone like him money, not his fault for being too much of a pri7ck to pay it back, same rules apply with banks.

[Dakhar]

movable debt = depreciation (in most cases) = buying to save face = stupid

[howtoescape]

movable debt = depreciation (in most cases) = buying to save face = stupid

The US and UK citizens have higher debt levels then any other people on the planet, i dont believe all this money was borrowed for the educational needs of their kids.

Thais are no more or less stupid about borrowing then anyone else.

[Heng]

movable debt = depreciation (in most cases) = buying to save face = stupid

The US and UK citizens have higher debt levels then any other people on the planet, i dont believe all this money was borrowed for the educational needs of their kids.

Thais are no more or less stupid about borrowing then anyone else.

If you take a snapshot of the current situation of the countries mentioned, I'd say the they are better off because even amongst the debtors, I think you'll find a much higher percentage that still have 100% equity in their homes, so they don't run as much of a risk of becoming destitute/homeless. The same cannot be said for a surprising amount of middle class home "owners" in the US and UK. And because of the nature of interest, that weight only becomes heavier and heavier.

[Dakhar]

movable debt = depreciation (in most cases) = buying to save face = stupid

The US and UK citizens have higher debt levels then any other people on the planet, i dont believe all this money was borrowed for the educational needs of their kids.

Thais are no more or less stupid about borrowing then anyone else.

If you take a snapshot of the current situation of the countries mentioned, I'd say the they are better off because even amongst the debtors, I think you'll find a much higher percentage that still have 100% equity in their homes, so they don't run as much of a risk of becoming destitute/homeless. The same cannot be said for a surprising amount of middle class home "owners" in the US and UK. And because of the nature of interest, that weight only becomes heavier and heavier.

Oh now, some folks want to make this into a racial thing or a this country vs that country.... my above statement still stands no matter what a persons race, color, creed etc is.

[soundman]

What the system can't screen out is stupidity.

Thanks heng, spilled my coffee after reading that.

[Heng]

I am here to spill your coffee, Soundman, no worries.

[Heng]

movable debt = depreciation (in most cases) = buying to save face = stupid

The US and UK citizens have higher debt levels then any other people on the planet, i dont believe all this money was borrowed for the educational needs of their kids.

Thais are no more or less stupid about borrowing then anyone else.

If you take a snapshot of the current situation of the countries mentioned, I'd say the they are better off because even amongst the debtors, I think you'll find a much higher percentage that still have 100% equity in their homes, so they don't run as much of a risk of becoming destitute/homeless. The same cannot be said for a surprising amount of middle class home "owners" in the US and UK. And because of the nature of interest, that weight only becomes heavier and heavier.

Oh now, some folks want to make this into a racial thing or a this country vs that country.... my above statement still stands no matter what a persons race, color, creed etc is.

Not saying it's a competition. Just a comment regarding the differences between the demographics involved. I agree with your comment.

[YoungFarang13]

someone want to tell me why banks in Asia don't lend money to buy a house to any Joe the way banks in the West do?

[Abrak]

Spare a thought for the average US household. Average debt per 'household' in Thailand is something like US$3500.

In the US credit card debt per 'individual' is about US$9,600. On top of that the average individual has household debt (e.g. mortgage debt) averaging about US$163,500 per 'individual' (not household). Of course their assets are much larger (although slipping fast) and wages are considerably higher BUT there is an indebted nation.

[Thai at Heart]

movable debt = depreciation (in most cases) = buying to save face = stupid

The US and UK citizens have higher debt levels then any other people on the planet, i dont believe all this money was borrowed for the educational needs of their kids.

Thais are no more or less stupid about borrowing then anyone else.

If you take a snapshot of the current situation of the countries mentioned, I'd say the they are better off because even amongst the debtors, I think you'll find a much higher percentage that still have 100% equity in their homes, so they don't run as much of a risk of becoming destitute/homeless. The same cannot be said for a surprising amount of middle class home "owners" in the US and UK. And because of the nature of interest, that weight only becomes heavier and heavier.

Oh now, some folks want to make this into a racial thing or a this country vs that country.... my above statement still stands no matter what a persons race, color, creed etc is.

Not saying it's a competition. Just a comment regarding the differences between the demographics involved. I agree with your comment.

Having 100% equity in a house, whilst simply a figure, is only worth something if you can realise the value. How many houses over 10 years old outside the most desirable parts of Thailand have any increased realisable value more than the day they were bought?

[astral]

Most of such debts were seen in low income families with low education which depended on loans outside the legal system, the central bank said.

--TNA 2008-04-15

5 - 10% per MONTH.

Perhaps the government should look at the Micro-Lending scheme started in South Africa

http://www.acts.co.za/usury/2_overview_of_..._and_supply.htm