HOUSHOLDS DEBT
Rising debt likely to keep households in the red

The Nation

BANGKOK: -- The National Credit Bureau has voiced concern that rising household debts may continue keeping people in the red, judging from the fact that most of the people who are repaying auto or personal loans earn less than Bt30,000 a month.

Surapol Opasatien, NCB chief executive officer, said household debts currently stood at 82.3 per cent of gross domestic product, the level Kasikorn Research Centre expected in 2016. He added that if the level of household debts hit 85 per cent, the state might have to take a closer look.

Studies show that on average, a Thai person earns Bt25,405 a month and spends Bt19,259, or 75.8 per cent, on monthly expenses. Also, debts average at Bt159,492 per household, so at least Bt6,144 needs to be saved per month to cover debt payments.

"The rate of debts to income tends to rise for those earning less than Bt10,000 per month, or about 1.6 million households," Surapol said.

In 2009, about 45 per cent of households earning Bt10,000 were in debt, which rose to 61 per cent last year.

The 3.7 million households earning Bt10,000-Bt30,000 per month spent up to 24 per cent of their total income covering debts in 2009, which rose to 34 per cent in 2013. Surapol said a rate of 40 per cent would still be acceptable, but if this figure kept rising, it could become a problem.

He said that amid the economic slowdown and rising household debts, financial institutions were paying more attention to indebtedness. Up to 79 financial institutions asked the NCB to provide the financial data of 16 million people in 2013, compared with requests for 6.5 million in 2012.

Banks also check all loan accounts on a monthly basis to monitor people's spending behaviour. Of the 71.5 million credit accounts in total, some 24 million have been closed, while "special-mention" accounts (31-90 days overdue) jumped 38 per cent from 840,000 in the first quarter of 2013 to 1.16 million in the same period this year. If this figure touches the 40-per-cent mark, then some measures will have to be taken, Surapol said.

'Special mention' loans

"Problems arise mainly from auto and personal loans, not residential loans," he said.

The number of "special mention" loans related to auto instalment plans soared to Bt156 billion at the end of the first quarter of 2014 from Bt64.6 million in 2010.

Meanwhile, up to Bt96.2 billion of personal loans entered the "special mention" category at the end of this year's first quarter compared with Bt13.1 billion in 2010, while the number in the residential category nearly doubled to Bt64.1 billion from Bt33.8 billion.

For people who have a relatively high level of auto or personal loans, banks may not approve their mortgage applications, Surapol said.

-- The Nation 2014-05-31

Buying a car is relatively easy ,its the running costs that people don't take into

account.

regards Worgeordie

A neighbour who works in a school with a very large proportion of rural children tells me that with the payment of rice pledging money in full swing many of the students are all twiittering about all the consumer items their parents have bought or ordered.

Big screen televisions, large refrigerators and the like plus supposed deposits on vehicles are mentioned but of course children exaggerate especially when their classmates are in full swing too.

This is not a condemnation of Thai family life only an explanation of what this teacher told me.

Perhaps other members with in-laws in the farming business can give a better first hand account.

The real worry is the informal lenders who make Shylock look good

Chalk up another one for the Thaksin govt. The auto program they instituted created little but debt and road congestion. We will soon see the fallout from all the unpaid loans.

It is worthy to note the increase in vehicle purchase debt , wouldn't have nothing to do with the PTP governments first car buyer plan, that they couldn't afford in the first place.

Only now they realize this? With high car import taxes (making cars way more expensive than countries such as the US), rising gasoline, food and property prices, how can anyone sustain their lifestyles in Thailand where minimum wage is 10 bucks a day??? Great economists they have in Thailand.

Their mathematics are appalling - if you need 19000 bht a month from 25000 bht that leaves 6000 bht to service your debt but apparently it's alright to have debt levels of up to 40% of your income i.e 10000 bht which leaves you 15000! Dugh!

Sent from my i-mobile IQ 2 using Thaivisa Connect Thailand mobile app

Car prices hardly make sense here (why am I not surprised)?

I bought (ok in TGF's name) a Mazda 4 door Hi-Racer pick up for 750,000 Thb and with the 1st car buyer tax bribe, got 80,000Thb back. Great vehicle for 670,000 Thb, just lacks a heater??? for demisting the windows in winter, but curiously has an electric rear window demister???

Just checked the price of the cheapest new Mazda CX5 diesel. 1,670,000 Thb. I presume most people will buy using finance, so why, why, why would anyone choose to pay almost 1,000,000 Thb more for a car that does less than what a pick up can do??? If money isn't an issue, then ok it's understandable. If it's an image thing, then buy a Mercedes.

I could have bought a 2,000,000 Thb car myself, but as a qualified vehicle technician I chose the best vehicle I could find that suited me at the best price available. Value for money doesn't seem to be a priority for many people here.

<script type='text/javascript'>window.mod_pagespeed_start = Number(new Date());</script>

Chalk up another one for the Thaksin govt. The auto program they instituted created little but debt and road congestion. We will soon see the fallout from all the unpaid loans.

It's been happening for a while now. I know of a loan shark in Khon Kaen that told us that she now had over 30 cars that she took as deposits on loans, which she now owned because the debtors could not repay the loans. 1 example, she charged an outrageous 10% per month and took a 1 year old car as deposit on an 80,000baht loan. The Debtor then had to find 8,000baht per month just to pay of the interest, which, being a poor villager, she could not afford. Another example of the utter stupidity of many Thai's, is a woman who borrowed 240,000baht over 5 a year period to pay for her daughters education. She had been paying the interest of 5,750baht per month for 11 years amounting to over 750,000baht paid to the shark. Not one baht was paid off of the original loan. After 11 years the loan shark then decided they wanted the principal back so the woman handed over her house.

Sadly Thailand is full of morons and predators like these people.

A neighbour who works in a school with a very large proportion of rural children tells me that with the payment of rice pledging money in full swing many of the students are all twiittering about all the consumer items their parents have bought or ordered.

Big screen televisions, large refrigerators and the like plus supposed deposits on vehicles are mentioned but of course children exaggerate especially when their classmates are in full swing too.

This is not a condemnation of Thai family life only an explanation of what this teacher told me.

Perhaps other members with in-laws in the farming business can give a better first hand account.

It seems to me that if Thais have money they spend it. If they don't have it they do without.

A fringe family member wanted a 10k Baht TV so she went to work in a Bangkok factory. Stopped work and came home when she had the 10k.

Another local event - a family who live in what westerners would describe as poverty, borrowed 20,000 Baht so they could arrange a 'lucky soi party' !

I would imagine that the level of debt from village lenders is a significant multiplier of official numbers.

Studies show that on average, a Thai person earns Bt25,405 a month

Really ?

Studies show that on average, a Thai person earns Bt25,405 a month

Really ?

Think many people think all Thais are poor.. often to feel better about themselves. I know plenty people making 20K plus. Not everyone is poor and the 40k farang pension is not a lot here.

Time to reintroduce financial prudence back into the system. BOT should rein in all those easy credit like low min. down payments, and credit cards being issued to low income earners.

The past decade has shown the poor financial discipline of most low and middle income earners, and they need a big stick.

Thailand does not need economic growth built on debts.

Studies show that on average, a Thai person earns Bt25,405 a month

Really ?

Think many people think all Thais are poor.. often to feel better about themselves. I know plenty people making 20K plus. Not everyone is poor and the 40k farang pension is not a lot here.

Quite...its a common myth put forward by some posters on TV that the average Thai earns 7-9000k/m...lives in a THB 3k/m room with no indoor plumbing and eats leaves from the side of the road and they are grateful for their lot..

suppose some farangs in Thailand need to keep telling themselves this so they feel better about themselves so they keep the myth about the superior farang overseeing "their" natives stays alive.

But one supposes this thread will deteriorate as normal when TV posters start listing their money outgoing to prove you can live as native on THB 5k/m.. and live a "good" life and any farang who spends more than 25k/m has to be an alcoholic, sexpat who is is not at one with their Thainess, and spends all their money on bar girls

“ For people who have a relatively high level of auto or personal loans, banks may not approve their mortgage applications “

no kidding!

If they are on an average salary of 25,000 baht and they already have an auto loan they shouldn't even be thinking of taking out a mortgage in addition

“ For people who have a relatively high level of auto or personal loans, banks may not approve their mortgage applications “

no kidding!

If they are on an average salary of 25,000 baht and they already have an auto loan they shouldn't even be thinking of taking out a mortgage in addition

What was the rule ?, if your mortgage payment was going to be more than 30% of your monthly salary...you probably can't afford it...

Consumerism, how the level of expectation and consumption is sustained is of little interest to the profiteers provided it continues at pace

Studies show that on average, a Thai person earns Bt25,405 a month

Really ?

Think many people think all Thais are poor.. often to feel better about themselves. I know plenty people making 20K plus. Not everyone is poor and the 40k farang pension is not a lot here.

I also know some Thais that earn 20.000, but I know plenty more who don't earn that. Now keep in mind that for every Thai that earns 15.000 which is way over the minimum wage already, you will need one that earns 36.000 to make the average of 25.405.

Studies show that on average, a Thai person earns Bt25,405 a month

Really ?

Think many people think all Thais are poor.. often to feel better about themselves. I know plenty people making 20K plus. Not everyone is poor and the 40k farang pension is not a lot here.

Not everyone works in BK.

Up in CM you would be lucky to earn 15k.

In a village 5k is a good wage.

Quite...its a common myth put forward by some posters on TV that the average Thai earns 7-9000k/m...lives in a THB 3k/m room with no indoor plumbing and eats leaves from the side of the road and they are grateful for their lot..

suppose some farangs in Thailand need to keep telling themselves this so they feel better about themselves so they keep the myth about the superior farang overseeing "their" natives stays alive.

But one supposes this thread will deteriorate as normal when TV posters start listing their money outgoing to prove you can live as native on THB 5k/m.. and live a "good" life and any farang who spends more than 25k/m has to be an alcoholic, sexpat who is is not at one with their Thainess, and spends all their money on bar girls

My niece lives near me in MaeJo, her wage is 7k5 for a 48hr 6 day week, overtime pays 20bht/hr and her condo costs 1k2 + utils.

Not sure where all your friends live and work.

My niece lives near me in MaeJo, her wage is 7k5 for a 48hr 6 day week, overtime pays 20bht/hr and her condo costs 1k2 + utils.

Not sure where all your friends live and work.

Studies show that on average, a Thai person earns Bt25,405 a month and spends Bt19,259, or 75.8 per cent, on monthly expenses.

No mention of BKK only in the OP

Buying a car is relatively easy ,its the running costs that people don't take into

account.

regards Worgeordie

And on that bombshell.........

Studies show that on average, a Thai person earns Bt25,405 a month

Really ?

Think many people think all Thais are poor.. often to feel better about themselves. I know plenty people making 20K plus. Not everyone is poor and the 40k farang pension is not a lot here.

I also know some Thais that earn 20.000, but I know plenty more who don't earn that. Now keep in mind that for every Thai that earns 15.000 which is way over the minimum wage already, you will need one that earns 36.000 to make the average of 25.405.

correct i think this is bangkok based,maybe with all the high earners thrown into the mix..people earn a minimal ammount where i live in issan..

A credit bubble bubbling away ready to pop. May be a great ride along the way though.

A credit bubble bubbling away ready to pop. May be a great ride along the way though. Giddy Up.

My niece lives near me in MaeJo, her wage is 7k5 for a 48hr 6 day week, overtime pays 20bht/hr and her condo costs 1k2 + utils.

Not sure where all your friends live and work.

Studies show that on average, a Thai person earns Bt25,405 a month and spends Bt19,259, or 75.8 per cent, on monthly expenses.

No mention of BKK only in the OP

Ever heard about flawed studies and surveys ?

Thailand the hub of ...............

Buying a car is relatively easy ,its the running costs that people don't take into

account.

regards Worgeordie

I think it had something to do with the first car rebate of 100,000 Baht that really boosted those figures. They just didn't want to mention that part in the report!

Special mention indeed.

Studies show that on average, a Thai person earns Bt25,405 a month

Really ?

Think many people think all Thais are poor.. often to feel better about themselves. I know plenty people making 20K plus. Not everyone is poor and the 40k farang pension is not a lot here.

Not a lot?My wife and I live off 40 k a month in a brand new condo.We eat out whenever, we buy clothes, go to Bkk and travel and have a really good standard of living! Depends on what you spend your money on! We don't have a car or scooter, don't drink much or do the nightlife scene!

Sent from my i-mobile IQ 2 using Thaivisa Connect Thailand mobile app

Drove most of my life owned several cars some classic up keep and insurance eats you alive. Now rent car if I need one or use taxi. But since most trips far make it easier to fly., No parking issues tickets gas flats, And I find now I do less one finger salutes too.

Studies show that on average, a Thai person earns Bt25,405 a month

Really ?

Think many people think all Thais are poor.. often to feel better about themselves. I know plenty people making 20K plus. Not everyone is poor and the 40k farang pension is not a lot here.

Not a lot?My wife and I live off 40 k a month in a brand new condo.We eat out whenever, we buy clothes, go to Bkk and travel and have a really good standard of living! Depends on what you spend your money on! We don't have a car or scooter, don't drink much or do the nightlife scene!

Sent from my i-mobile IQ 2 using Thaivisa Connect Thailand mobile app

It's not a lot at all everyone knows it and your pretending to be rich and having a high life.

I own a car and 2 bikes not much of the night life and in general I don't drink. I can get by on 40k and quite often do as I save the rest of the money I make. But to think that 40k is a lot is just crazy.

As you said it really depends how you spend your money and what you eat. I like quality fruits and meats. Not Thai style food with a few scraps of meat.