Loan sharking and debt: A vicious cycle in Thailand with no foreseeable solutions

[TimCM]

After spending the last few years working around different areas of Thailand, I believe these figures are massively understated. I met families that had a household earnings of less than B10k/month that had multiple flat screen TV's, new sports truck and new motorbikes all bought on credit. They were then borrowing of loan sharks to feed themselves.

The situation is similar to China which also has this ticking time bomb.

The suggestion by some that the loan sharks should just be rounded up is also not workable but there does need to be some regulation of the industry

[CHRISTIANa9]

After spending the last few years working around different areas of Thailand, I believe these figures are massively understated. I met families that had a household earnings of less than B10k/month that had multiple flat screen TV's, new sports truck and new motorbikes all bought on credit. They were then borrowing of loan sharks to feed themselves.

The situation is similar to China which also has this ticking time bomb.

The suggestion by some that the loan sharks should just be rounded up is also not workable but there does need to be some regulation of the industry

China has loan shark problem ? On massive scale like thailand?

Sent from my iPad using ThaiVisa app

[TimCM]

After spending the last few years working around different areas of Thailand, I believe these figures are massively understated. I met families that had a household earnings of less than B10k/month that had multiple flat screen TV's, new sports truck and new motorbikes all bought on credit. They were then borrowing of loan sharks to feed themselves.

The situation is similar to China which also has this ticking time bomb.

The suggestion by some that the loan sharks should just be rounded up is also not workable but there does need to be some regulation of the industry

China has loan shark problem ? On massive scale like thailand?

Sent from my iPad using ThaiVisa app

Not even comparable. Loan sharking (inclusive of the shadow banking sector) is on a scale bigger than the entire Thai economy. Most small businesses are funded this way as well as poor households in debt spirals. Same problems with thugs collecting though. They tend to not beat up bad payers but cut off things.

[surangw]

loaning money is what keeps all the gold shops in business, no crack down on them ?

[Cake Monster]

All this debt, and the Junta make available more cheap rate loans for SME,s.

Many, Many, SME " companies " here are not as you would assume them to be, but only a man/wife team with a small mini-mart shop,on the road side.

Much of this loan money made available will not be loaned on a " business forcast and show me your P& L accounts for the previous year " basis, but on a " you have business - OK, I give you loan " basis.

Needless to say, a large proportion of any loans made available will not go to busness used, but to personal use.

[ALFREDO]

I received a news text today indicating that more bank loans are to be made available to farmers to get them out of the hands of loan sharks.

Whilst the interest rates will be a lower a loan is still a loan and has to be repaid one way or another and I find it hard to believe that farmers and their families taking these loans will still not use their friendly neighbourhood loan sharks.

It would be interesting to hear from members who have farmers in their extended family.

"friendly neighbourhood loan sharks."

Who, what should that be?

They are not cheaper, usually, so 3 - 5 % a month positive to pay, even with a security of a house or land paper ownership and a contract, even put on the land paper in the land office.

More easy accessible Bank loans to "normal" rates would be a relief.

Not easy to get here in rural Isaan TH a loan from a bank for land or house if you are only a farmer.

Cheapest Private loan I heard and know, my GF uses, is 13,5 % a year interest with 100 % secure loan-land papers contract in land office from a wealthy Chinese family, which is overwhelmed by interested,

want to be borrowers.

I remember, how easy, I got, unemployed, a loan in my EU country on my house and land,

loan = about 30 % of the price, I, short before paid before, for the plot and house.

Nearly impossible here.

[DrTuner]

It's all about face/Keeping up with the Joneses.

Yeah, Asian face culture combined with western consumerism. Explosive.

[attrayant]

First rule of holes: when you're in one, stop digging.