The National Credit Bureau (NCB) has issued a call for stricter risk controls among providers of buy now, pay later (BNPL) services to curb the misuse of these platforms for creating informal loans. NCB CEO Surapol Opasatien expressed concerns that BNPL, while expanding access to financial services and enhancing financial inclusion, is being exploited to facilitate loan sharking activities.
The misuse of BNPL services has been underscored by instances where customers utilize these platforms for lending at steep interest rates similar to those charged by loan sharks. For instance, it was reported that a user of a BNPL service managed by a private group employed the service’s funds to pay another individual’s electricity bills while charging exorbitant interest rates.
The Central Bank has warned that such practices could lead to increased financial risks, including debt defaults and financial fraud. In light of these risks, Kasikornbank has taken proactive steps by halting the acquisition of new customers for its K Pay Later service, which was available through its K-Plus mobile banking app. The service previously allowed customers to pay for various expenses in installments, offering a maximum credit line of 20,000 baht at an interest rate capped at 25% per year and extending repayment periods up to five months.
Krungsri Consumer, the unsecured loan unit of Bank of Ayudhya, also offers BNPL services through collaborations with various partners. Krungsri customers can avail BNPL services for purchases at participating stores, with installment periods of up to 36 months via the UChoose mobile application. (NNT)
