NPLs among households soar to 980 billion baht
In a worrying trend, non-performing loans (NPLs) among Thai households in the first quarter of 2023 rose to 980 billion baht, or 7.6% of overall household debts of 12.9 trillion baht, the National Economic and Social Development Council (NESDC) reported on Monday.
In its report on the economic situation of Thai society, the council quoted statistics from the National Credit Bureau, which indicated that Thais had accumulated debts in 83.1 million accounts as of the end of the first quarter.
Of all the NPLs, only one-third are the result of loans from commercial banks (2.6% of overall household debts.) This means most Thais accumulated debts from non-bank financial institutes, said Vorawan Plikamin, deputy secretary general of the NESDC.
She said that young workers (aged under 30) and seniors aged 50-59 merit close monitoring as the NPLs caused by these groups increased the most, at 4.1% year on year.
“Gen Y (aged 18-32) are the most worrisome as they have a habit of spending on expensive products without giving thought to the future of their finances,” she added.
Vorawan added that NPLs among seniors have expanded the most in the past three years (2020-2022) at an average of 10.2% per year. However, this is due less to extravagant spending than to a decreased capacity for earning and repaying debts.
NESDC pointed out that auto loans made up the biggest tranche of NPLs in the first quarter of this year, expanding 30.3% year on year, the highest level in 14 quarters.
The council said some 95,000 vehicles are at risk of being repossessed as their buyers, most of whom are under 30, have started to default on repayment.
To tame the rising NPLs in household debts, NESDC advised the Bank of Thailand and related authorities to monitor the loan provisions of financial institutes and ensure that they comply with the laws and responsible financial practices.
It also advised the National Credit Bureau to exempt application fees to attract membership of loan providers so as to gain actual statistics on Thais’ household debts.
Lastly, the council advised teaching financial literacy to Thais of all ages covering key topics such as financial planning, investment, and saving.
In the report on Thai society issued on Monday, the NESDC also said the employment situation improved in the second quarter of 2023, with 39.7 million people finding work, increasing 1.7% from the same period last year.
The average monthly salary of Thais is 14,032 baht per month, while the unemployment rate dropped from 1.37% last year to 1.06%
Some 430,000 Thais were reportedly out of work in the second quarter of 2023.
