Thai debt crisis deepens: 284,000 pickups facing repossession

Thailand’s household debt crisis has left many people "bearing debt beyond their capacity", with 284,000 pickup trucks at risk of repossession, says the National Credit Bureau (NCB).

While household debt has fallen to 16.3 trillion baht, or 89.6% of GDP, the overall debt problem for Thais has worsened, according to NCB president Surapon Opassathien.

Total credit debt currently amounts to 13.6 trillion baht, covering financial institutions, non-banking institutions, nano-finance, and provincial-level microfinance (PICO) across around 158 institutions. 

Savings cooperatives report an additional 2.3 trillion baht of debt not included in NCB’s data. Around 800 billion baht of this debt belongs to teachers and education staff, contributing to debts totalling 1.4 trillion baht in this profession, representing a significant portion of "debt beyond capacity".

More troubling still is the value of non-performing loans (NPLs) – with payments overdue by more than 90 days – at 1.2 trillion baht.

Five million people out of 33 million debtors hold NPLs in the NCB system. The bad debt is spread across different loan categories:

Housing (230 billion baht), car loans (260 billion baht), credit cards (70 billion baht), personal loans (278 billion baht), and nano-finance loans (10 billion baht).

Surapon said bad debt had surged from just over 7% in the first quarter of 2023 to 8.8% by the third quarter of 2024. The NCB forecasts it will rise to 200 billion baht to 1.4 trillion baht next year.

The NCB chief said many people now hold debts beyond their ability to repay, with some only able to pay interest, others on the brink of default, and some already in default. Car loans are particularly concerning, with 260 billion baht in bad debt, representing 836,000 overdue cars. An additional 537,000 cars, worth 197 billion baht, are at high risk of repossession.

The biggest concern is that pickup trucks, which many people rely on for work, account for a significant portion of bad debts. Currently, 43 out of every 100 financed vehicles are pickup trucks, and 52 out of every 100 bad debts involve pickups.

There are 2.9 million pickup trucks with outstanding loans, with 2.1 million in good standing. However, 284,000 pickup trucks are in arrears and at risk of repossession, totalling 100 billion baht, or 51.4% of the overall car loan portfolio.

Bad debts in this segment now total 471,000 vehicles worth 151 billion baht, a 27.5% increase from the previous year. Additionally, 66,000 vehicles are undergoing debt restructuring, totalling 26 billion baht, or 56% of all car loans.

Surapon noted that the government and financial institutions have launched the "You Fight, We Help" programme to help people avoid deeper debt. This initiative aims to improve debt quality and assist those at risk of default.

However, he emphasised that addressing debt issues requires more than just income to repay loans. Borrowers need to take responsibility for managing their debt and avoiding further debt accumulation. Uncertainty over economic growth in 2025 made it unlikely that household debt would decrease as quickly as hoped, he said.