Thai household debt skyrockets, predatory lending mushrooms

[gemini81]

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.

And the previous government did not 'encourage' debt? (as far as anyone actually did encourage Somchai to buy a second truck)

As you say, simple common sense - how does that bode negatively for this, or any, political party?

I simply cannot see how seemingly absolute blame can be placed on a government (either) when it is the finance/banking industry that is

going into warp drive

after we spelled out to you their plan for massive debts: car, home, credit, get rich in 6 months????.....much beyond the previous admin

Edited June 26, 2013 by gemini81

[Ricardo]

Cue a government Minister, to tell all the people, that the answer to all their credit-problems is to marry a farang, perhaps ?

[Robby nz]

Don't forget that the govt also gave the farmers and taxi drivers credit cards.

Probably few understood the implications of these things and the interest that is charged on them.

Don't know what it would be on the ones the Govt gave out but I do know, on a normal bank one, that it is horrendous if they are not paid off at the end of each month.

I chucked mine in when my bank started charging for when the card was not used.

[Soutpeel]

"Mushroom"..must be the English word of the month in the Thai press, havent we already had mushrooms this week in the "Thai ladies selling used knickers on line" news story ?

"Hub" must be so past tense now and the new buzz word is "mushroom"

But I must admit...the concept of predatory mushrooms scares the h*ll out me, see what happens when man genetically modifys food ?....what's next bi-polar apples ? narcissistic bannana's ?

[ratcatcher]

predatory lending mushrooms

I tried to picture a predatory mushroom in my mind's eye. Scary stuff indeed.

So did I.

[pistachios]

50% of household debt from loan sharks is a shockingly huge number.

However I wonder how they could come up with this figure as, by definition, this kind of lending flies under the radar.

Edited June 26, 2013 by pistachios

[Sing_Sling]

50% of household debt from loan sharks is a shockingly huge number.

It is this government's fault . . . well, it is Yingluck's fault. Personally. Clearly.

Hey, this is easy.

[lungmi]

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.

This government developed the corruption up to 40% and more. Common use in Thailand was 20 -30 % without Thaksin.

[AnotherOneAmerican]

My sister in law has a 60 year mortgage and a 2 year old daughter. Great future she set up for her

That isn't true.

A home loan can only be issued until the recipient is 65, minimum age for home loan is 20.

So longest possible home loan is 45 years.

[AnotherOneAmerican]

"Mushroom"..must be the English word of the month in the Thai press, havent we already had mushrooms this week in the "Thai ladies selling used knickers on line" news story ?

"Hub" must be so past tense now and the new buzz word is "mushroom"

But I must admit...the concept of predatory mushrooms scares the h*ll out me, see what happens when man genetically modifys food ?....what's next bi-polar apples ? narcissistic bannana's ?

A hub balanced on a stalk becomes a mushroom.

[NeverSure]

Cue a government Minister, to tell all the people, that the answer to all their credit-problems is to marry a farang, perhaps ?

Actually if this farang was at all interested in being married, this might be the safest route of all. The gal is very cute and educated. She already owns a house and a pickup with payments. There is no massive cash outlay. Just move in with her, admit to only maybe a 40k baht pm income, add it to what she has and live on the 70k. Don't pay off her house or car. just help with the payments, but be free to walk if needed and leave her as she was. 70k is enough for a couple in rural Isaan, and simply leave everything else in the home country and don't reveal it.

Maybe buy a car and scooter before marriage so they could be taken, and leave her as she was if she's hard to live with. Otherwise, kick back and live a simple Isaan life with a cute gal. It might actually be the alternative to getting cleaned out.

Just a thought.

Edited June 26, 2013 by NeverSure

[hotrod4098]

i lived in issan for a while..the green bank..bac.had truck loads of people getting loans..every day..i just could not believe it..

hard cash 200 300 400 hundred thousand to some people who can never pay it back..

it seems they treat it like free money...they never think of tomorow so it dont matter to them...live for to day only..

and thats the problem with thais

[retell]

well thats one step closer to being a western society

they should make even more easy for people to lend money , to not look for the loan sharks and if they catch em do not put them in jail but just fine them 5000 thb and a slap on the hand

extend the first car scheme and make a second or even third car scheme , lend money to young couples with low income for their first house

feel sorry and not for the ones caught in this web of easy borrow

[Sing_Sling]

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.

This government developed the corruption up to 40% and more. Common use in Thailand was 20 -30 % without Thaksin.

I'm glad you have facts to back that up . . . I'll be very interested to see them, thanks . . as I'm sure you're not one of the anti-Thaksin robots referred to previously, rather a person who looks at facts without bias

[Sing_Sling]

"Mushroom"..must be the English word of the month in the Thai press, havent we already had mushrooms this week in the "Thai ladies selling used knickers on line" news story ?

"Hub" must be so past tense now and the new buzz word is "mushroom"

But I must admit...the concept of predatory mushrooms scares the h*ll out me, see what happens when man genetically modifys food ?....what's next bi-polar apples ? narcissistic bannana's ?

A hub balanced on a stalk becomes a mushroom.

Very good!

[GAZZPA]

The judgement day is coming!!!

Agree. You only have to look at what the easy access credit did to the Western world to see how damaging this is, (and using loan sharks is really scary) Trying to lift or maintain economic growth by encouraging loans for domestic consumption will only fall over, it simply has no where else to go. It seems most of Asia is in a rush to be "wealthy" like the West. Hankering for the latest gadget or car or whatever when you don't have the readies is dangerous when credit is available to even the most uncredit worthy. It's all false and will cause massive issues in even the medium term.

[PoodMaiDai]

I wonder how many iPhones and iPads have been bought that they couldn't afford? That is all I see these days, kids on Apple devices looking at Facebook.

[PoodMaiDai]

i lived in issan for a while..the green bank..bac.had truck loads of people getting loans..every day..i just could not believe it..

hard cash 200 300 400 hundred thousand to some people who can never pay it back..

it seems they treat it like free money...they never think of tomorow so it dont matter to them...live for to day only..

and thats the problem with thais

And this is exactly why you have to keep your ears to the ground to snatch up amazing land and home deals. The Thais BURY themselves in debt, be it from the bank or loan sharks, and often will sell what they have at insanely low prices just to break even. Amazing deals are everywhere when you have dumb and desperate people.

[finnomick]

We have a mushroom farm so if you want to borrow some, get in touch..... ( sorry )

[MaxYakov]

Cue a government Minister, to tell all the people, that the answer to all their credit-problems is to marry a farang, perhaps ?

Of course, he will fail to stipulate that it has to be farang with money.

Edited June 26, 2013 by MaxYakov

[MaxLee]

i lived in issan for a while..the green bank..bac.had truck loads of people getting loans..every day..i just could not believe it..

hard cash 200 300 400 hundred thousand to some people who can never pay it back..

it seems they treat it like free money...they never think of tomorow so it dont matter to them...live for to day only..

and thats the problem with thais

And this is exactly why you have to keep your ears to the ground to snatch up amazing land and home deals. The Thais BURY themselves in debt, be it from the bank or loan sharks, and often will sell what they have at insanely low prices just to break even. Amazing deals are everywhere when you have dumb and desperate people.

Or lets just say the Thais bury themselves into debt for the sake of FACE STATUS....

[finnomick]

Let's get real. It doesn't matter which party did it. There is the new car scheme which has put many people into debt. There is the new home no down payment scheme which is putting even more people into debt. There are cell phone plans and now there are credit cards.

I've posted before that I know a teacher in Isaan who has a master's degree and some sort of supervisory role in a school in Isaan. She makes 30k baht pm. She has a new home on that scheme, and a new pickup on that other scheme. She has a smart phone. She can barely afford to live. She has no idea what the interest rates or terms are on her pickup or her house. Fortunately they are bank loans and not loan shark loans.

She really didn't understand what she was getting into. She has no experience with credit. She'll make it, but she'll be living very tight for a long time.

Knowing this is a government loan, she'll probably be paying it off for the rest of her working life. My wife's sister just did the same. Borrowed 1 million baht ( she's a teacher too ) and will be in debt to the government for over twenty years. Still, I suppose it guarantees her staying in her job for life.....

If that wasn't bad enough, she bought a new car under the ' first car scheme '. A Toyota Yaris costing just over 700,000 baht. Thing was, she didn't buy it with the cash, but on finance making two huge loans. I thought teachers would be brighter......

Edited June 26, 2013 by finnomick

[finnomick]

"Mushroom"..must be the English word of the month in the Thai press, havent we already had mushrooms this week in the "Thai ladies selling used knickers on line" news story ?

"Hub" must be so past tense now and the new buzz word is "mushroom"

But I must admit...the concept of predatory mushrooms scares the h*ll out me, see what happens when man genetically modifys food ?....what's next bi-polar apples ? narcissistic bannana's ?

I'll warn the wife so she keeps her wits about her when she's in the mushroom sheds picking tomorrow morning.....

[KRS1]

There is a private loan office in every single province in Thailand.

The way to identify them is - they are totally and completely painted red, with white text and all are the same franchise....some of you probably noticed them and wondered what they were.

[AnotherOneAmerican]

Let's get real. It doesn't matter which party did it. There is the new car scheme which has put many people into debt. There is the new home no down payment scheme which is putting even more people into debt. There are cell phone plans and now there are credit cards.

I've posted before that I know a teacher in Isaan who has a master's degree and some sort of supervisory role in a school in Isaan. She makes 30k baht pm. She has a new home on that scheme, and a new pickup on that other scheme. She has a smart phone. She can barely afford to live. She has no idea what the interest rates or terms are on her pickup or her house. Fortunately they are bank loans and not loan shark loans.

She really didn't understand what she was getting into. She has no experience with credit. She'll make it, but she'll be living very tight for a long time.

Knowing this is a government loan, she'll probably be paying it off for the rest of her working life. My wife's sister just did the same. Borrowed 1 million baht ( she's a teacher too ) and will be in debt to the government for over twenty years. Still, I suppose it guarantees her staying in her job for life.....

Loans to teachers and government staff are at special rates, some for a house can even be interest free.

Lets say home loan repayment 5k/month, car loan repayment 10k/month.

Thai earning 30k/month could do that easily.

For other people.

SCB will lend 1.5M on an income of 25k/month with repayments of 12.5k/month.

Edited June 26, 2013 by AnotherOneAmerican

[finnomick]

And wasn't it yesterday the Bank for Agriculture and Agricultural Cooperatives made 10 billion baht available for farmers who will be affected by the cut in pledged paddy price. Fuel added to the fire.

[finnomick]

Let's get real. It doesn't matter which party did it. There is the new car scheme which has put many people into debt. There is the new home no down payment scheme which is putting even more people into debt. There are cell phone plans and now there are credit cards.

I've posted before that I know a teacher in Isaan who has a master's degree and some sort of supervisory role in a school in Isaan. She makes 30k baht pm. She has a new home on that scheme, and a new pickup on that other scheme. She has a smart phone. She can barely afford to live. She has no idea what the interest rates or terms are on her pickup or her house. Fortunately they are bank loans and not loan shark loans.

She really didn't understand what she was getting into. She has no experience with credit. She'll make it, but she'll be living very tight for a long time.

Knowing this is a government loan, she'll probably be paying it off for the rest of her working life. My wife's sister just did the same. Borrowed 1 million baht ( she's a teacher too ) and will be in debt to the government for over twenty years. Still, I suppose it guarantees her staying in her job for life.....

Loans to teachers and government staff are at special rates, some for a house can even be interest free.

Lets say home loan repayment 5k/month, car loan repayment 10k/month.

Thai earning 30k/month could do that easily.

For other people.

SCB will lend 1.5M on an income of 25k/month with repayments of 12.5k/month.

Interest or interest free, a 1 million baht loan over twenty years equals a repayment of 50,000 baht a year. One heck of a hole in a teacher's pay packet

[hellodolly]

well thats one step closer to being a western society

they should make even more easy for people to lend money , to not look for the loan sharks and if they catch em do not put them in jail but just fine them 5000 thb and a slap on the hand

extend the first car scheme and make a second or even third car scheme , lend money to young couples with low income for their first house

feel sorry and not for the ones caught in this web of easy borrow

Didn't Thaksin set up a loan scheme to help the farmers. They all went out and bought new motor bikes and cell phones and never paid it back

[tominbkk]

" buying property and assets such as houses and cars "

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

We can blame the PTP populist car buying scheme for that!

[sustento]

predatory lending mushrooms

I tried to picture a predatory mushroom in my mind's eye. Scary stuff indeed.

http://supraterranean.com/pranagenius/2010/03/26/cordyceps-unilateralis-the-predatory-mushroom/