The Bangkok Post has just published an article discussing how lack of access to conventional loans has pushed many Thais to seek money from exploitative loan sharks.
Apparently, some of these loan sharks have taken to charging their clients as much as 3% interest per day, which comes out to a staggering 1,095% per year.
Permanent secretary for justice Kittipong Kittayarak said that Thai household debt has risen 5.7% year-on-year, reaching an average of THB168,000.
While a lack of understanding about the contracts they’re signing has allowed many Thai citizens to fall afoul of unscrupulous creditors, the hesitance of Thai banks to make loans to small or medium-sized businesses has only exacerbated the problem.
In explaining the conservative policies of Thailand’s financial institutions, Thawatchai Yongkittikul, secretary-general to the Thai Bankers Association, also offered some helpful advice to potential lenders: He said that commercial banks are reluctant to give money to borrowers who are alcoholics (okay), addicted gamblers (also reasonable), or who seemed “flirtatious” (what?), as these traits usually led to difficulty in repaying loans.