Financial markets/ financial institutions : Personal Loans

Overview

• Personal loans are provided by Thai banks, branches of foreign banks, and non-bank financial institutions. Non-bank lenders hold the largest customer base with 72.9 percent of all personal loan accounts in the country, followed by Thai banks with 19.2 percent and branches of foreign banks with 8.7 percent.

• Thai bank loans account for 46.5 percent of the total outstanding balance on personal loans, followed by non-bank financial institutions at 44.8 percent, and branches of foreign banks at 8.4 percent.

• The outstanding balance on non-bank personal loans is less than that of banks because their customers tend to be those with low to moderate incomes. Focusing on a large customer base of those with monthly incomes less than 10,000 THB (286 USD), the loans approved by non-bank lenders tend to be smaller than those approved by banks.

• The Bank of Thailand limits the cost of personal loans, including interest, fines, service charges, and fees to not more than 28 percent per year. For example, per annum interest may be 15 percent and fees 13 percent, or interest may be 20 percent and fees 8 percent.