Kenan Institute urges concerted effort to lift Thai financial literacy

[webfact]

HOUSEHOLD DEBT
Kenan Institute urges concerted effort to lift Thai financial literacy
Sirivish Toomgum
The Nation


Kenan Institute Asia chairman Piyabutr Cholvijarn (second from right) shares his idea about LIFT project.

BANGKOK: -- Kenan Institute Asia has called for state and private parties to act in tandem to improve financial-literacy education in Thailand in the wake of the country's ballooning household debt.

The institute recommends that in order to urgently enhance national financial-literacy efforts, stakeholders should join forces to raise public awareness and stimulate the public's interest in this crucial area.

Regulators should work together more closely, and in the same direction, in order to provide more financial protection to people, enhance their financial knowledge and launch more semi-compulsory programmes on savings, financial management and debt control, it said.

The institute yesterday released the results of its "Literacy Improvement for better Finance in Thailand (LIFT)" research study, which was conducted with support from the Citi Foundation.

The one-year study, which started in November 2013, focused on financial literacy among three key groups: young adults, low-income workers and farmers.

It found that these groups have low levels of financial knowledge and poor personal financial management.

Low levels of financial knowledge - or functional financial literacy - mean that individuals lack critical logical thinking and calculation skills.

Poor personal financial management is often reflected in poor financial behaviour, such as failing to repay loans, which is especially common with student loans, the study found.

Kenan Institute Asia chairman Piyabutr Cholvijarn yesterday said that with support from the Citi Foundation and the assistance of Citi, Thailand, the institute had conducted the research study as part of the LIFT project, which assessed the government's policies relating to debt and savings, and engaged stakeholders across all segments of society, including debtors, policy-makers and bankers.

He expressed concern that the ratio of household debt to gross domestic product could reach 100 per cent in the next few years.

As of the third quarter of last year, the total amount of household debt in the Kingdom's formal financial system stood at Bt10.2 trillion, or 84.2 per cent of GDP, one of the highest rates in Southeast Asia, according to the Bank of Thailand and the National Economic and Social Development Board

The household-debt-to-GDP figure was up from 55.6 per cent in 2008.

Darren Buckley, country head and Citi country officer, Citibank, added: "Citi is an industry leader in its support of financial-literacy education. In 2004, Citi announced a 10-year, US$200 million [bt178 billion] commitment to meet the growing financial education needs of the communities.

"In 2014 alone, the number of financial-literacy projects conducted globally by the Citi Foundation numbered 167, which helped over 1.2 million people around the world."

The LIFT project was initiated in Thailand in response to rapidly rising household debt levels at the rate of 15 per cent per year since 2010, he said.

This high level of debt, coupled with a falling savings rate - down 16 per cent per year during the past decade to 5.8 per cent per annum since 2010 - should alarm everyone, he stressed.

He said all stakeholders in the country's financial system had a duty to ensure that those who used financial products and systems did so responsibly.

He added that it was important that the government had recognised the critical need to address financial-literacy education, and had already begun the process of addressing this.

The LIFT project aligns well with these efforts, including the need for more resources to be focused on low-income workers, farmers and students, Buckley said.

Source: http://www.nationmultimedia.com/business/Kenan-Institute-urges-concerted-effort-to-lift-Tha-30255267.html


-- The Nation 2015-03-04

[harada]

Let me know when the school opens I'll send the missus and her family down.

[Seastallion]

It's a worthwhile goal, unfortunately it will take more than just information.

"....... mean that individuals lack critical logical thinking ........".

The biggest impediment to logical thinking in this area is status and face. It's far too embarrassing to not have a nice looking motorbike or the latest Galaxy 12.

[alant]

I seem to recall the government being reported on here as stating household debt was not a problem.

[webfact]

Study reveals rising household debts among students, workers and farmers



BANGKOK: -- Sign of rising indebtedness among three main groups of people has now prompted authorities to worry about social problems that will arise and deteriorate.

Rising concern came as recent study shows that students, youths, lower earning workers and farmers have extremely low money handling skills which have put them at the head of indebted groups in the country.

Kenan Institute of Asia chairman Piyabutra Cholvicharn revealed the findings of a study carried out since 2014 which three main groups were focused on.

They are students and youths, lower income workers and farmers which worryingly have incurred the highest amount of debt compare to other groups.

The study attributes three main reasons for the phenomenon which are low financial savvy, poor personal money management attitudes and finally limited access to high income sources accompanied by ignorance of checks and balance mechanisms.

It is for these reasons that these three groups are stuck in a continuous cycle of debt and poverty.

One resultant outcome of these factors is an outbreak of ‘shunning debt repayment’ behaviour, he said.

Meanwhile City Bank Thailand chief executive Darren Buckley who is also the representative of the City Foundation, commented that the foundation has set up a program to provide financial education to address the rising problem of household debts in the country.

Household debt has risen by 15% on average since 2014 while savings has fallen to only 1.5% per annum which is a very worrying sign, he said.

Mr Darren advised relevant authorities and monetary institutions to act upon the findings and foster more responsible financial awareness in the public.

Source: http://englishnews.thaipbs.or.th/study-reveals-rising-household-debts-among-students-workers-and-farmers


-- Thai PBS 2015-03-04

[Seastallion]

And where is most of this debt held? Not in banks or lisenced lenders, but with illegal loan sharks who lend at usury rates. I know of one lady, friend of Wifey's, that has a 100 000 loan from a Chinese Thai lady (married to a cop) who charges 20% PER MONTH!!!!

You can say more fool the borrower, but when you're desperate and you don't have the education to realise the implications, you're not a fool but a pity.

It's these loan sharks that have to be wiped out.

[wabothai]

How can you enhance financial knowledge if the basics of basics, like logic is not understood.

The banks will have to take the lead here and act more responsible, that will mean that less loans will be written out and thus less profit.

Now I am sure they are not interested and willing to do so.

The easy way out, not having the will to learn and the relentless pursuit of free will eventually lead to RIP Thailand.

[seajae]

as long as we have thainess we will continue to see this, no one wants to appear to not have money and will go to great lengths to do so, face is simply too important to many thais. The repayment of loans is also another big problem as they simply think if they dont pay no one will know, trouble is the ones that loaned the money let it go on for far too long before they act, really need to come down on them much quicker and heavier but again, face seems to be too important to do so.

[angiolo]

Nice car and renting a rubbish tip as a house

[Srikcir]

"Kenan Institute urges concerted effort to lift Thai financial literacy"

Gen. Prayut having access to the nation's financial experts has already addressed this issue:

"Please refrain from racking up debts, junta leader Prayut Chan-O-Cha told viewers in a recent edition of his weekly televised address, warning mounting bills may slow down the country's progress." 2015-02-11

If Thai people don't heed the advice of their great leader, it's their fault for continued increase in household debt.

[Robby nz]

Have a look at the graph in the BKK post and see the rise in household debt in the last few years.

Then make up your own mind which Govts brought about the rise in debt by their policies.

[AZBill]

Good luck with that one!