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Thai household debt skyrockets, predatory lending mushrooms


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Thai household debt skyrockets, predatory lending mushrooms
By English News

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BANGKOK, June 26 – Thai household debt rose to a record five year high at 64 per cent – a 12 per cent increase from last year, according to an academic survey.

Thanawat Polwichai, director of the Economic and Business Forecast Centre (EBFC) of the University of Thai Chamber of Commerce (UTCC), said the average household debt is Bt188,774.54 with a monthly repayment requirement of Bt11,671.93.

Lending through loan sharks and the legal lending system were almost equal at 49.6 per cent and 50.4 per cent respectively. but the percentage of predatory lending increased by 13.6 per cent during the period, he said.

The survey found that low-income earners who borrowed less than Bt5,000, mostly from loan sharks, have had difficulties repaying their debts especially during the economic slowdown in April and May.

Seventy per cent of low income people said they had failed to repay their debts in the past year and risked being intimidated and assaulted by lenders.

Reasons for escalating debts are the higher cost of living at 23.3 per cent, school expenses for children at 22 per cent, buying property and assets such as houses and cars at 13.5 per cent. and other new debts at 10.3 per cent.

Those earning more than Bt15,000 a month sought loans from credit card lenders and were capable of debt repayment, Dr Thanawat said.

He said the UTCC forecasting centre will readjust its estimate of Thailand’s growth, earlier forecasted at 5 per cent, on July 8 given the country’s economic slowdown. (MCOT online news)

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-- TNA 2013-06-26

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buying property and assets such as houses and cars " blink.png

they will learn in the not too distant future that it is highly debatable to refer to cars as “ assets “sad.png

You are right on that one mate more like liabilities when bought on tick.

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Oooops.

I see that a property developer is setting up a 2bn baht fund offering guaranteed returns on rental property in phuket to international investors. Reported in the other paper.

Why would they need to do that if they were sold?

Edited by Thai at Heart
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These predatory mushrooms must be stopped.... right now.

Sorry to be flippant but this situation was so predictable it's hard to take anything this government says or does seriously any more.

Loan sharks, credit cards etc.... What does 'this' government have to to do with it - is this something new to Thailand?

Those populist policies are working out real well it seems. The only "mushrooms" here though are the supporters of this current Govt, spoon fed on cr@p and kept in the dark.

I really don't understand how 'this' government can be blamed for the lending practices being discussed here - are you saying that this is a first under the new 'leadership'

I'm very apolitical about Thailand because everyone is out for themselves and their cronies - and reading the anti-Yingluck robots blame everything under the sun on this government is as ridiculous as reading the Thaksin-apologists rant on.

simple: their encouragement of debt. A long time plan by Thaksin himself (remember the ridiculous mobile phone prices he had farmers buying up a decade ago?)

First time home buyer & car buyer for folks who'll bite off more than they can chew.

They did it to collect cheer/votes for their party.

To have not encouraged such debts would have been to tell them to rent, not finance. To buy 2nd hand cars for those who can't afford new.

Simple common sense. Credit card lessons and debt lessons learned abroad; but not quite yet for Thailand (its need for the latest phone, fad, I pad, red license plates). Its catching up.

I would've thought the 'Tom Yam Goong' crisis would've taught a few lessons, but some were too young to understand what occurred and have learned from it.

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These predatory mushrooms must be stopped.... right now.

Sorry to be flippant but this situation was so predictable it's hard to take anything this government says or does seriously any more.

Loan sharks, credit cards etc.... What does 'this' government have to to do with it - is this something new to Thailand?

Those populist policies are working out real well it seems. The only "mushrooms" here though are the supporters of this current Govt, spoon fed on cr@p and kept in the dark.

I really don't understand how 'this' government can be blamed for the lending practices being discussed here - are you saying that this is a first under the new 'leadership'

Oh, I don't know, but it could be something along the lines of ......... this government with it's ill-conceived vote winning polices have put more people into the situation where they have to borrow money just to live, and some people who have no assets have no option but to borrow from the sharks.

Something like that.

Exactly.

I appreciate Sing Sing is apolitical... as (according to her spokesperson) is Yingluck.

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These predatory mushrooms must be stopped.... right now.

Sorry to be flippant but this situation was so predictable it's hard to take anything this government says or does seriously any more.

Loan sharks, credit cards etc.... What does 'this' government have to to do with it - is this something new to Thailand?

Those populist policies are working out real well it seems. The only "mushrooms" here though are the supporters of this current Govt, spoon fed on cr@p and kept in the dark.

I really don't understand how 'this' government can be blamed for the lending practices being discussed here - are you saying that this is a first under the new 'leadership'

Oh, I don't know, but it could be something along the lines of ......... this government with it's ill-conceived vote winning polices have put more people into the situation where they have to borrow money just to live, and some people who have no assets have no option but to borrow from the sharks.

Something like that.

Ok, so this is the case for the former government as well where people got into debt with loansharks, got 700k loans for their new truck on a 4k monthly income and so on and so on.

I'd love to hear some examples because what I read here is that the populist policies of throwing money at the population is a bad thing (which it is, of course) - like the rice scheme, increasing the minimum wage . . . but isn't that increasing and/or guaranteeing people an income?

Can't have it both ways

Edited by Sing_Sling
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as I predicted those that bought cars they didn't need or couldn't afford under the 100k first car scheme are now discovering that the 100k refund will not make the payments for very long on the loans they thought was a good idea at the time - not sure the government has even paid the 100k as promised

Throw the farmers into the mix over the next few months and again as I predicted - this country is in deep doo doo, I also stated that that was the intention of TS in the first place - revenge is sweet

There will be a set of ex PT ministers with a huge pile of cash under the bed and the rest of the people and the country will be in ruins

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"He said the UTCC forecasting centre will readjust its estimate of Thailands growth, earlier forecasted at 5 per cent, on July 8 given the countrys economic slowdown."

Economical Slowdown? But everything was peachy rosy I've been told?

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These predatory mushrooms must be stopped.... right now.

Sorry to be flippant but this situation was so predictable it's hard to take anything this government says or does seriously any more.

Loan sharks, credit cards etc.... What does 'this' government have to to do with it - is this something new to Thailand?

Those populist policies are working out real well it seems. The only "mushrooms" here though are the supporters of this current Govt, spoon fed on cr@p and kept in the dark.

I really don't understand how 'this' government can be blamed for the lending practices being discussed here - are you saying that this is a first under the new 'leadership'

I'm very apolitical about Thailand because everyone is out for themselves and their cronies - and reading the anti-Yingluck robots blame everything under the sun on this government is as ridiculous as reading the Thaksin-apologists rant on.

The government came in with a scheme to make every one rich higher minimum wages farmers getting fantastic price on their crops. Credit cards for farmers and Taxi drivers cheaper new automobiles for first time buyers. Thaksin told them give him 6 months and he will make them all rich. People believed all this stuff and went out and ran their credit up. The Government conveniently forgot to mention that the cost of living was going to go up that many people making more than 9,000 baht a month would in effect make less because of cut in benefits and hours of overtime.sad.png

Your rite what has the Government got to do with it.coffee1.gif

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These predatory mushrooms must be stopped.... right now.

Sorry to be flippant but this situation was so predictable it's hard to take anything this government says or does seriously any more.

This administration only? Red, yellow, green, purple, pink, etc., never mind their color: are they really, really an example of probity and integrity? Situation predictable 50 years ago. Floods predictable 100 years ago. Dengue fever going on forever but... these statements show that politicians and heads of quasi-government organizations really care about the little people. Grandstanding to get from time to tie in the public eye. Nothing will change because those at the top of the pyramid of power do not want an educated, empowered with rights population.

You are correct they do not want an educated, empowered with rights population.

the first thing they must do in order to empower the citizenship is educate them.

The last thing they plan on doing is educating them.

This has allowed them to throw a lot of unsound ideas around with a veneer of you are going to be better off than you were with out us so the uneducated went out and bought things on credit thinking things were going to get better. The government had told them so.

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So I'm in Mr Tongs in Udon Thani and a 28ish year old Thai young woman starts talking to me at the bar. Later we walk out to parking lot to leave and she gets in a new Nissan quad cab pickup truck with big tires and lift kit. A really expensive truck. She said you like my truck? I was expecting her to grab a taxi. I really am wondering where all the money is coming from for all this stuff

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So I'm in Mr Tongs in Udon Thani and a 28ish year old Thai young woman starts talking to me at the bar. Later we walk out to parking lot to leave and she gets in a new Nissan quad cab pickup truck with big tires and lift kit. A really expensive truck. She said you like my truck? I was expecting her to grab a taxi. I really am wondering where all the money is coming from for all this stuff

I was with this lady in Bangkok and she said she had to go to the bank on behalf of her brother to pay the monthly instalment on his pickup truck. He worked as a sales assistant at Homemart. I have no idea what his monthly salary is but his pickup truck was costing him 11,000 baht a month. sad.png After he had paid for his room, plus food plus everything else I couldn't imagine there would be much left over .

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governments/financial institutions,,same/same,,but even if you only had a few brain cells you must surely know whether you can afford any repayments on a loan,,surely,,my wifes cousin (THE FOOL THAT HE IS) bought a truck,i thought mmm must be earning a fortune,he sells ice cream,,whistling.gif ,,anyway he only went and asked me if i could borrow him the first months repayment,,,after almost having a mini stroke ,,,i said NO,,,,im still laughing now,,,,maybe the ice cream gave him brain freeze when he went to the bank,,,i will never know,,they say theres one in every village,,and i dont mean a post office,,coffee1.gif

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