Thailand’s 13.6tn-baht debt problem moves into small loans
National Credit Bureau Co Ltd (NCB) warns small loans are reshaping Thailand’s 13.6tn-baht household debt, as borrowers hold an average of four debt accounts each
Thailand’s household debt problem is entering a more complicated phase, with the total debt stock broadly stable but small-ticket borrowing and repayment risks rising sharply, according to the National Credit Bureau.
Dr Luxmon Attapich, CEO of National Credit Bureau Co Ltd (NCB), said Thailand’s household debt currently stands at about 13.6 trillion baht. Over the past one to two years, the overall value of household debt has not increased significantly, while the ratio of household debt to GDP has been moving lower.
However, she warned that the more serious issue lies in the quality of debt rather than the headline debt figure.
The key area of concern is non-performing loans, or debts overdue by more than 90 days. In the first quarter of this year, NPLs stood at about 9.3%. Although that appeared to be lower than at the end of last year, the figure did not remove the need for close monitoring.
At the same time, debt restructuring has risen to above 10%, raising concerns that some restructured accounts could slip back into NPL status if borrowers are unable to complete the restructuring process successfully.
Another warning sign is the rapid increase in the number of debt accounts in the system. Under the total debt value of 13.6 trillion baht, there are now 98.7 million loan accounts, meaning each borrower holds an average of four debt accounts.
NCB has also found that the value of debt per account is becoming smaller. This contrasts with large-ticket loans, particularly auto loans, where lending has become more difficult and some debt has begun to disappear from the system.
By contrast, smaller forms of borrowing, including personal loans and nano finance, have grown more significantly and are making up a thicker layer of household debt.
Debt quality has deteriorated particularly among instalment loans for mobile phones and electrical appliances, where overdue payments have climbed to nearly 20%.
Dr Luxmon said this trend had been clearly visible since the middle of last year and had continued into the beginning of this year.
“The arrival of e-commerce platforms has caused the number of small debt accounts to jump rapidly, and they are still growing continuously,” she said.
The warning suggests that Thailand’s household debt challenge is no longer only about how much people owe, but also about the changing structure of borrowing. As large loans become harder to obtain, smaller consumer loans are spreading more quickly, creating new repayment risks across a wider base of borrowers.
