Bangkok – A study by the Bank of Thailand (BOT) has found that overall Thai household debt is still running at a high, unsustainable level and government agencies are advised to maintain strict supervision of financial institutions’ lending policies.
Soamrasat Chantharat, head of research group Puey Ungphakorn Economic Research Institute, disclosed that the study, conducted from 2009-2018, showed that the proportion of household debt owed to large commercial banks and state-owned specialized financial institutions had actually declined over the period, in contrast to the increase in the growth of debt owed to medium-sized commercial banks and non-financial institutional service providers.
Most loan applications were submitted by existing borrowers. Only one-fifth of loans were granted to new borrowers. Most of them were car loans, home loans, motorcycle and personal loans.
Existing borrowers were found to have increased their overall debt by taking out loans with multiple financial institutions, especially unsecured loans which often have a deteriorated credit quality.
The government is trying to resolve the household debt problem by promoting financial knowledge, issuing measures to regulate credit card and personal loans under the supervision of the BOT, and establish debt relief clinics.
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