Thai Household Debt Mountain Remains at THB 13.5 Tillion Despite Dip in Bad Loans

Credit Bureau chief highlights surge in proactive debt restructuring and calls for more support for struggling borrowers

 

Thailand's household debt pile remains a significant concern, hovering around 13.5 trillion baht in the first quarter of 2025, according to the National Credit Bureau (NCB).

 

While there was a slight dip in non-performing loans (NPLs), the head of the NCB, Surapol Opasatien, has highlighted a substantial increase in proactive debt restructuring and urged for greater compassion and support for borrowers battling to stay afloat.

 

Surapol revealed the latest figures in a Facebook post, noting that while the overall national household debt stands at 16.2 trillion baht, the data collected by the Credit Bureau from over 160 financial institutions accounts for 13.5 trillion baht.

 

Within this, NPLs have fallen slightly to 1.19 trillion baht, a decrease of 30 billion baht since January. This bad debt affects 5.15 million individuals across 9.13 million accounts.

 

A closer look at smaller bad debts, those under 100,000 baht, reveals a total of 120 billion baht, representing about 10% of all NPLs and impacting 3.28 million borrowers with 4.44 million accounts.

 

Surapol argued that a comprehensive strategy to address this segment could provide relief to millions.
  

He pointed out that much of this smaller debt is unsecured and has already been fully provisioned for by creditors. 

 

He questioned the efficacy of lengthy legal proceedings against these individuals, suggesting it might be more beneficial to help them regain their financial footing and contribute to the economy. 

 


"Wouldn't it be better to help them become a working force driving the economy? Is 10 years of lawsuits and enforcement worthwhile?" he asked.


 

Acknowledging concerns about creating a culture of non-repayment, Surapol stressed the harsh realities of the current economic climate, where falling into bad debt triggers severe consequences, including restricted access to future credit.

 

He also questioned whether leniency was adequately applied during the pandemic, particularly for smaller debts.

 

He further suggested that writing off these smaller debts might not significantly impact creditors' profits, especially considering potential tax benefits from bad debt provisions and the relatively low returns from selling these debts to asset management companies.

  

On a more positive note, loans classified as Special Mention (SM), those at risk of becoming NPLs, have decreased year-on-year by 10.8% to 575 billion baht.

 

Post-NPL debt restructuring (TDR) remains largely static at 1.08 trillion baht. However, there has been a significant 31.7% quarter-on-quarter surge in pre-NPL preventative debt restructuring (DR), now standing at 1.12 trillion baht.

 

Surapol interpreted this as a clear indication that struggling borrowers are increasingly being offered and accepting DR options mandated by regulations, effectively acting as a "giant dam" preventing a further influx of loans into NPL status.

 

He concluded with a plea for greater support for those adhering to their DR agreements, describing them as having "fought the debt battle" and deserving of a "You Fight, We Help" approach.

 

He questioned why these individuals, who are demonstrating their commitment to repayment, are not being offered further assistance, suggesting a more compassionate approach would be more effective and aligned with the stated goals of debt relief programmes.

(2025/05/08-00:00)