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8 Oct 2020

Econ Digest

Digital personal loans increase accessibility to loans for Thai people


Under the Digital Personal Loan Business Rules issued by the Bank of Thailand on September 15, 2020, lenders can use alternative data, e.g. receipts from water bills, electricity bills and telephone bills, as well as online spending information, to assess the borrowers’ ability or willingness to repay a loan. KResearch views that this will help to support people in easily accessing credit services in the official financial system.


In addition, the interest rates under the newly-announced Digital Personal Loan will also help to lower borrowers’ costs compared with digital loans through current online platforms, which are as high as 36%, or with off-system (outside the official financial system) loans, which are higher than 50% per year. Therefore, it is expected that more off-system borrowers will be able to access credit in the system. Meanwhile, some existing lenders in the market that already use alternative data such as photographic data or social media posts will be able to provide another type of digital personal loan service at lower interest rates.     


KResearch still believes that customers who have used digital personal loans will be familiar with this service and will find it convenient. Because of the  existing digital personal loan service processed through online platforms, customers will be encouraged to continue using the new service. Digital personal loans will probably be an alternative form of loan that provides liquidity to consumers in emergencies, although the loan amount is capped at THB20,000 with a short repayment period not exceeding 6 months.



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Econ Digest