Steep rise in household loans: bot

Loans granted by brokerage houses jumped the highest, by 125 per cent over the period.

Meanwhile, household income increased by only 11 per cent over the past two years. Economists raised concerns as people shifted their savings, which gives low interest, to invest in risky assets such as gold, property and stocks.

Average household income was Bt23,236 in 2011, up Bt2,333 or 11 per cent over the Bt 20,903 in 2009, and up Bt4,576 or 25 per cent over the Bt18,660 in 2007.

The household loans granted by deposit institutions, comprising commercial banks and state-owned special financial institutions, increased from Bt4.85 trillion in 2009 to Bt7.71 trillion at the end of last year, up Bt2.86 trillion or 59 per cent.

Of that, commercial banks granted Bt3.65 trillion of household loans last year, up by Bt1.35 trillion or 59 per cent over the Bt2.30 trillion granted by the banks in 2009. Meanwhile, the government’s special financial institutions granted Bt2.75 trillion in household loans last year, up Bt1 trillion or 58 per cent over 2009, which was at Bt1.74 trillion.

Savings cooperative institutions also granted Bt1.31 trillion of household loans last year, up Bt518 billion or 65 per cent over the Bt795 billion granted in 2009, while other deposit institutions, such as finance and credit foncier companies, granted Bt2.61 billion of household loans last year, down Bt12.1 billion or 82 per cent from the Bt14.7 billion granted in 2009.

Household loans granted by other financial institutions were at Bt1.10 trillion last year, up Bt380 billion or 53 per cent over the Bt719 billion granted in 2009. Household loans granted by credit card, leasing, and personal loan firms were at 818 billion last year, up Bt311 billion or 62 per cent over the Bt506 billion granted in 2009.

concerns over household debts

Insurance and life insurance firms also granted Bt70.2 billion of household loans last year, up Bt9.85 billion or 16 per cent over the Bt60.3 billion granted in 2009. Securities firms also granted Bt91 billion of household loans last year, up Bt50.5 billion or 124 per cent over the Bt40.4 billion granted in 2009. Asset management companies granted Bt52 billion in household loans last year, down Bt15.2 billion or 23 per cent from the Bt67.3 billion granted in 2009.

Pawn shops granted Bt61 billion of household loans last year, up Bt21.7 billion or 55 per cent over the Bt39.3 billion granted in 2009. Other financial bodies – the Financial Institutions Development Fund (FIDF), Government Pension Fund (GPF), Secondary Mortgage Corporation (SMC), and Thai Credit Guarantee Corporation (TCGC), granted Bt6.43 billion last year, up Bt1.23 billion or 24 per cent over the Bt5.19 billion granted in 2009.

Banluesak Pussarangsri, an executive vice-president of CIMB Thai Bank, has raised concerns over household debts, which have increased quite rapidly over the past few years. According to the BOT, the average debt level of households is now 70 per cent of their income, sharply up from only 40 per cent previously.