Author Topic: Household debt problems starting to have a serious impact on the economy  (Read 1137 times)

Offline thaiga

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Loan sharking and debt: A vicious cycle in Thailand with no foreseeable solutions

BANGKOK, 23 July 2014 (NNT) - Household debt problems in Thailand are starting to have a serious impact on the economy, resulting in more and more people having to turn to loan sharks to make ends meet.

For this reason, the National Council for Peace and Order (NCPO) has cooperated with relevant agencies to find a way to help tackle this problem. Some debtors have even committed suicide, as they were unable to pay back their loans or frightened by loan sharks’ violent debt claims.

The Bank of Thailand (BOT) has reported that the total household debt now stands at 9.79 trillion baht or 82.3 percent of the country’s GDP, which is a rather worrying statistic.

Meanwhile, the National Credit Bureau (NCB) of Thailand also reported that at least 1.1 million borrowers are starting to fall behind on their debt payments during the first quarter of 2014. Compared to last year, only 850,000 of them had trouble repaying their loans.

Unsurprisingly, these are some reasons that most people, especially low-income earners, turn to informal lenders to make ends meet. Should debt problems prolong, then Thais would be trapped in a vicious cycle of debt where there would be no foreseeable solution to resolve this problem.

Anyone who goes to a psychiatrist should have his head examined.

Offline pop401k

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Thank God the junta is in charge...we'll have good news on this by the weekend, and everybody will be happy again.

Offline thaiga

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Re: Poll shows household debts the worst in nine years
« Reply #2 on: July 24, 2014, 06:05:51 PM »
Household debts have increased to an average of 219,000 baht per household this year which are the highest level in nine years with 49 percent of the debts being unorganized debts, according to a study conducted by the University of Thai Chamber of Commerce.

Economic and Business Forecast Centre director Thanawat Pholvichai of the university said the centre conducted behaviourial spending of 1,200 households during July 14-20. The findings from the study are as follows:

74.8 percent of the households polled said their debts have increased this year whereas 25.2 percent said they have no debts; average household debts amount to 219,000 baht representing an increase of 16.6 percent compared to last year’s average household debts which amounted to 188,000 baht.

The reason why many households resorted to unorganized money lenders because they had borrowed up to the limits permissible by financial institutions.

39.7 percent of the households said they borrowed for personal spending; 17 percent said they borrowed to repay unorganized debts and 10.9 percent said they borrowed to buy vehicles.

Asked about their ability to repay debts, 83 percent admitted that they used to have problem of repaying debts and 17 percent said that they did not have any problem.
Anyone who goes to a psychiatrist should have his head examined.