Thai working people heavily in debts with loan sharks, says UTCC

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Thai working people heavily in debts with loan sharks, says UTCC



BANGKOK: -- The University of the Thai Chamber of Commerce (UTCC) revealed that Thailand is seeing the highest rate of household debts in 8 years, with debts averaging at around 119,000 baht per family.

It said 60 per cent of debts among working people were borrowed from loan sharks for general payments, as well as to buy house or car.

The latest survey by UTCC was conducted from 1,212 working people who earn less than 15,000 baht a month during April 18-23.

Of all the people asked, 95.9% were in debt incurred mainly by daily expenses, buying vehicles and household purchases.

It said the average debt per family is at 119,061 baht, the highest level in eight years, up from 117,840 baht last year and 87,399 baht in 2009.

Unorganised loans represent 60.6% of debts, an increase from 59.6% last year and 48.5% in 2009.

The survey also found that working people want the government to increase minimum wage from 300 baht a day to 356 baht, cut contributions to the social security fund and stimulate economic growth because they they are worried about possible unemployment, although there was no sign of mass layoff, but cutting employees’ overtime payments and freezing new recruitment were underway now.

Source: http://englishnews.thaipbs.or.th/content/161573


-- Thai PBS 2016-04-29

[condo bought]

Gotta have the new Hilux and iPhone.

[smedly]

As I predicted 4 years ago - people will buy cars they cannot afford encouraged by the "one car scheme" - they got the rebate but can longer keep up the payments, a great ill thought out vote buying scheme by the last government and is turning out to be a disaster

[laolover88]

Household debt in the UK is huge. Mainly because of house prices/mortgages. Household debt in Thailand is unsustainable as no-body wants second hand cars or houses. The only asset of value is land. I can buy a secondhand Mercedes for 50,000 Baht in the UK. Here it is 200,000 Baht. I can buy a house in the UK for 10M Baht. But I can probably sell it. Here I can buy one for 5M Baht Unsaleable. The Bank will take it if I don't pay the loan, but they can't sell it either. Cuckoo land.

[Lannig]

Household debt in the UK is huge. Mainly because of house prices/mortgages. Household debt in Thailand is unsustainable as no-body wants second hand cars or houses. The only asset of value is land. I can buy a secondhand Mercedes for 50,000 Baht in the UK. Here it is 200,000 Baht. I can buy a house in the UK for 10M Baht. But I can probably sell it. Here I can buy one for 5M Baht Unsaleable. The Bank will take it if I don't pay the loan, but they can't sell it either. Cuckoo land.

Although I think you do have a point, you're contradicting yourself. If no-one wanted 2nd hand cars, the prices would be low. As you've pointed out, second-hand cars are insanely expensive in Thailand.

[kingstonkid]

Thailand has gotten and learned a lot from the QUOTE more modern countries UNQUOTE.

The problem is that not everything they learn is good. A Thai with a credit card is almost the same here as a kid getting free use of mom and dad's credit cards.

There is little need to worry about paying and people will always give you a new card.

The Loan sharks are a different breed but people still think that the government is going to bail them out.

[elgordo38]

Household debt in the UK is huge. Mainly because of house prices/mortgages. Household debt in Thailand is unsustainable as no-body wants second hand cars or houses. The only asset of value is land. I can buy a secondhand Mercedes for 50,000 Baht in the UK. Here it is 200,000 Baht. I can buy a house in the UK for 10M Baht. But I can probably sell it. Here I can buy one for 5M Baht Unsaleable. The Bank will take it if I don't pay the loan, but they can't sell it either. Cuckoo land.

Although I think you do have a point, you're contradicting yourself. If no-one wanted 2nd hand cars, the prices would be low. As you've pointed out, second-hand cars are insanely expensive in Thailand.

Haven't you read the many threads on here in the past where used cars sit on lots for years with the owners unwilling to lower the price. Its the same in rentals if the owner sees your making a profit he wants to double the rent only to see the tenant move out and the building sit empty for years. Its the principal if it does not sell double the price.

[Balance]

I thought the government took care of the loan sharks last year some time. What happened?

[ovenman]

I thought the government took care of the loan sharks last year some time. What happened?

Nothing apparently.

[StatlerandWaldorf]

This is a case of playing the fiddle while Rome burns.

I think everyone with any sense can see that the Thai economy has taken a serious downturn, but what is reported is often quite the opposite.

Just like when the old Government were telling everyone that prices of everyday food items were not increasing when they quite clearly were.

Crime also appears to be on the rise which goes hand in hand with a struggling economy, and violent crime increasing with people's frustration.

[marcusd]

This is total garbage! The Junta paid everything and sorted these loan sharks when they came in. I read it here on Thia visa

[mgjackson69]

Household debt in the UK is huge. Mainly because of house prices/mortgages. Household debt in Thailand is unsustainable as no-body wants second hand cars or houses. The only asset of value is land. I can buy a secondhand Mercedes for 50,000 Baht in the UK. Here it is 200,000 Baht. I can buy a house in the UK for 10M Baht. But I can probably sell it. Here I can buy one for 5M Baht Unsaleable. The Bank will take it if I don't pay the loan, but they can't sell it either. Cuckoo land.

Although I think you do have a point, you're contradicting yourself. If no-one wanted 2nd hand cars, the prices would be low. As you've pointed out, second-hand cars are insanely expensive in Thailand.

Used cars in Thailand are not expensive due to demand...there are plenty of used cars sitting on lots everywhere.

The prices are high because people here do not understand depreciation.

"Asking price" is not an accurate representation of what used cars are bringing...one needs to consider what the cars actually sell for.

[SkyNets]

I have bought and sold a few secondhand cars here, and the prices always shock me. Thai people seam to think a 8 year old car with no warranty should be priced very close to a new one, I have never worked it out. When I sold one to a local guy and said "here are all the recites of work over the past 4 years" he smiled and said "no no, you keep" lol, didn't even look at the mileage.

[trogers]

Increase minimum wages or cut savings?

Increase minimum wage without increase in productivity means more layoffs...

Using savings for the future means no money to retire nor emergency funds for a rainy day.

Best is to change to a flip phone, and use the mass transit.

[bangon04]

Have money... buy iPhone.

No have money... borrow money... buy iPhone

[Praematura]

Yea yea yea. I know Thais buy too much shit. God forbid they have a new phone or car like the rest of humanity rather than scrapping by. Next they will want refrigerators!

[Familyonthemove]

Household debt in the UK is huge. Mainly because of house prices/mortgages. Household debt in Thailand is unsustainable as no-body wants second hand cars or houses. The only asset of value is land. I can buy a secondhand Mercedes for 50,000 Baht in the UK. Here it is 200,000 Baht. I can buy a house in the UK for 10M Baht. But I can probably sell it. Here I can buy one for 5M Baht Unsaleable. The Bank will take it if I don't pay the loan, but they can't sell it either. Cuckoo land.

Although I think you do have a point, you're contradicting yourself. If no-one wanted 2nd hand cars, the prices would be low. As you've pointed out, second-hand cars are insanely expensive in Thailand.

Used cars in Thailand are not expensive due to demand...there are plenty of used cars sitting on lots everywhere.

The prices are high because people here do not understand depreciation.

"Asking price" is not an accurate representation of what used cars are bringing...one needs to consider what the cars actually sell for.

I too was confused by the high used car prices in Thailand - until I realized it's linked to the debt issues highlighted in the OP.

Most cars in Thailand are bought with loans - and new car finance needs payroll and bank data to secure a loan at a reasonable interest rate. They also need a deposit (although often a small one).

But used cars can be bought using loans from loan sharks and no deposit or salary documentation needed. This creates an artificially high value market in used cars. So the used car market is the visible tip of the loan shark iceberg

So cars are a business opportunity for loan sharks to make money from the people who cannot access the new car finance scheme - and the value is based on the business opportunity and not the value of the car itself. Try to buy a car from one of the used car lots for cash and ask for a discount - they are not interested. They don't make their money on the car. They get paid a commission by the loan company, and that's where the profits are.

Another factor is that many used cars under 4 years old are subject to debt from the original owner's loan to buy the car - so the 'price' is based on the value of the outstanding debt.

Looks like we're heading for another Asian Financial Crisis - and in 1997 you could buy used cars for cash really cheap.

[DrTuner]

Happiness is a new pickup, big party and a debt you'll never be able to repay.

[feelitwell]

sad to see how jet another country is being ruined by "social standarts", greed and unstoppable desire to be better than neighbors.

and all this within just short ten years. This is obvious that people here have no experience with financial side whatsoever and will yet to see true downswing

Sent from my SM-J200GU using Tapatalk

[likewise]

Yea yea yea. I know Thais buy too much shit. God forbid they have a new phone or car like the rest of humanity rather than scrapping by. Next they will want refrigerators!

And your point is ? Buying stuff they cannot afford is better, right ?

Quite simple really, if you can afford it buy it, if you can't do not buy it. But hey, they have to look important and "smart" with their iphones and cars for which they have little or no money to fill the tank.

[feelitwell]

Well, one has to understand that these days the area is really gray in terms of can one actually afford one thing or another

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Edited April 29, 2016 by feelitwell

[feelitwell]

But i truly start to believe that it is not the fault of people.

we all see how governments are pushing the consumer based ideology.

so one will become 'hooked slowly over the years when there is no good role model to learn from

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[tuanku]

I thought the government took care of the loan sharks last year some time. What happened?

Nothing apparently.

They were invited to become registered lenders, they did not respond (having no association and no mechanism to do so) in the affirmative and nothing further was done.

[ExpatOilWorker]

Household debt in the UK is huge. Mainly because of house prices/mortgages. Household debt in Thailand is unsustainable as no-body wants second hand cars or houses. The only asset of value is land. I can buy a secondhand Mercedes for 50,000 Baht in the UK. Here it is 200,000 Baht. I can buy a house in the UK for 10M Baht. But I can probably sell it. Here I can buy one for 5M Baht Unsaleable. The Bank will take it if I don't pay the loan, but they can't sell it either. Cuckoo land.

Although I think you do have a point, you're contradicting yourself. If no-one wanted 2nd hand cars, the prices would be low. As you've pointed out, second-hand cars are insanely expensive in Thailand.

Used cars in Thailand are not expensive due to demand...there are plenty of used cars sitting on lots everywhere.

The prices are high because people here do not understand depreciation.

"Asking price" is not an accurate representation of what used cars are bringing...one needs to consider what the cars actually sell for.

Out of interest I have been following prices of the F10 BMW 5-series for a couple of years and taken a screen shot of the 30 cars listed on one2car. Some of the cars have indeed been sitting at the same dealers for more than 12 months.

[feelitwell]

markets are upside down and is precisely created due to lack of experience and knowledge of how financial side works as a whole, layer by layer from government to everyday 'user' of fiat currency

Sent from my SM-J200GU using Tapatalk

[jadee]

I'd love to know what percentage of those '1,212 working people who earn less than 15,000 baht a month' who were interviewed own an iphone - I bet it's high. One thing I noticed early on about Thai people is that money is no barrier where image is concerned. They love spending money they don't have on stuff they don't need, I know most people in every country do that to some extent but Thais seem to take it to the nth degree. Like going into debt for an iphone.

[khunpa]

I thought the government took care of the loan sharks last year some time. What happened?

You need some serious Attitude Adjustment ;-)

[khunpa]

- Lowest employment rate in the world.

- Constant economic growth.

- Singapore level by 2025.

- Hub of everything.

- All problems begin taken care of.

- Everybody constantly happy.

Who would have thought....

[Praematura]

I know a lot of Thais and I don't see them buying a new phone every year as some have claimed. These people, like all people want something nice so they get a phone.

Your all hypocrites since most countries and their people are in debt. 160% GDP for China or even more debt in Japan. Let's not go into the trade deficit the USA has with other countries or the monumental credit most in the USA have.

If wealth was slightly more proportionally distributed in Thailand then these folks could afford a phone or a car without going into these micro debt transactions.

Go read about Russia and debt collectors in the NY times and see where Thailand is headed.

[Lannig]

OK, my bad for having a momentary lapse of judgement trying to apply a rationale (market price) to the pricing of second hand cars. You people who've corrected me are absolutely right, especially Familyonthemove who's mentioned the loan issues.

Yes, pretty much the same for house rents. It has happened to me, after renting a townhouse for 5 years, after applying some fresh paint the landlord suddenly decided to multiply the rent by more than two. I moved and the place has been empty since then (almost 2 years), slowly degradating...

Same goes for restaurants with very few customers. The "Thai logic" is to raise the price.

Edited April 29, 2016 by Lannig