Thailand Offers More Assistance to Combat Loan Sharks in the Country
BY VIRAJ SHAJ



BANGKOK: -- Loan sharks in Thailand are partially to blame for the rising household debt that is responsible for Thai’s spending less money on goods and services. Loan sharks lure in clients that are in need of money and offer such high rates that the loans can’t be paid back sufficiently without taking out further loans, creating a vicious cycle of debt.

The Thai government announced today that they will offer 50 billion baht in soft loans to help residents refinance non-formal debts, such as debts taken on from loan sharks.

The Bank for Agriculture and Agricultural Cooperatives (BAAC) along with the Government Savings Bank(GSB) are offering 1% interest rates per month with an annual interest rate of just 12%. Nano finance interest rates in the country can reach 36% by law.

The BAAC previously allowed for non-formal borrowers to refinance their debt, with 36,000 out of 100,000 people able to benefit from the program. The bank refinanced a total of 3 billion baht in debt.

Full story: https://ethailand.com/business-news/thailand-offers-more-assistance-to-combat-loan-sharks-in-the-country/2916/

-- eThailand 2016-06-17

So if somebody can't pay back a loan shark who is threatening to break their legs or shoot them what incentive is there to pay back a soft loan from a bank?

My guess is the default rate on this scheme will be huge.

So if somebody can't pay back a loan shark who is threatening to break their legs or shoot them what incentive is there to pay back a soft loan from a bank?

My guess is the default rate on this scheme will be huge.

And of course many of the people that borrow will either do something else with the money or go back to the same loan sharks later for more money. Bailing out the borrowers is not the answer. Enforcing the law and cleaning up the mafia-like lenders is the only solution. But of course they are likely to be so well connected and/or "protected" that they are untouchable.

A country with laws, but non enforceable!

Loan sharking are here to stay, the borrowers need them more than the other way around,

they go to them when getting loans from legal landing institutions fails.....

Maybe most Thais wouldn't even be able to buy all the goods if there were no Loan Sharks?

What happens if no loan sharks borrow money and smartphone and car sale goes back by 50%?

I guess many a Thai has talked to a farang about how they borrow money and they need to pay it back.

Of course this conversation occurs when they need to "borrow" off you to pay a bank or loan shark.

but ask them "what interest rate do you pay?"

often you will get a blank stare, or "not know or "no interest rate.. or thai lend money not same same."

or some other such nonsense.

I suspect many dont even read contracts,are just told to pay x amount for x time, and no further questions are asked.

Its a bit like simpletons in the west, taking a loan for 25 years, not understanding how many different variables effect the term of loan, and wonder why after 25 years they still owe X amount.

You cannot expect people to know how these things operate at first, but to do a little researching before jumping in.is not to hard.

But to just blindly take the money and not want to check the terms or even read the contract because " it to give me headache"...well, what can you call that?

sorry to say, but how do you help simpletons?

Every week loansharks drive through my Gf's moo ban and throw out business cards in the driveway........All day long I see motorcycle drivers dressed in black with full face helmets collecting money.....

I have seen this first hand - neighbors being charged at a rate of 20% per Month - YES PER MONTH, they have little education and in desperation they take the loan. 10,000 Baht becomes 14k in 1 month 89k in 1 year, they struggle to even pay off the interest

From memory, we were taught economics 101 in the first year of secondary school ( maybe 15y.o).

Of course the first lessons would be the banking system, interest rates, types of loans etc.

By the time you were 18 and looking for a car loan, you knew exactly what it all entailed.

The fact that many Thai adults dont have the first clue of how to calculate what you will eventually pay back from a 10k loan,

as the posters example above, its an absolute disgrace and a prime example on how broken is the education system here.

The good general is wasting his time cracking down on all and sundry and trying to regulate cowboys in this industry.

good god, it cant be that hard! ...Just educate the population and the loan sharks will soon have a very big drop in business!

who are the loan Sharks. I could name a large company who have been trading as Legit

the interest rates and other charges would frighten you

Impossible , when the loansharks are fed the Thai gamblers from normal everyday regional Casinos run by the Mafia, through a gangster level of initial loan collector, fed the gambler by the casino, who then , normalises the loan into the 'respectable' loanshark companies accounts, from his account, decoupling the gamblers debt from its casino source.

So if You see 500 casinos close then maybe it's true.

But You know one massage parlour one Casino here piffle!

There are hundreds normal but slightly secret businesses.

Yo Ho Ho and a bottle of rum!

I wouldn't mess with a loan shark anywhere, never mind Thailand. They operate outside of the legal system. It's also a recruiting system - you can't pay your loan, then maybe you can do this favor for us.