Young generation in Bangkok and adjacent provinces are found to be over-indebted than young people in the provinces, with 20% of indebted persons holding more than five loan contracts, according to the research by the Puey Ung-Phakorn Institute for Economic Research.

The institute under the Bank of Thailand conducted the research entitled “X-Ray of Thai Debt Incursion Habits,” by utilizing information from the “Big Data” database of the Credit Bureau taken from 2009 up to July 2016.

The research outcomes were published on the institute’s website on Sept 6.

The study discovered that generally Thai people take out 3 types of loans–credit card loan; personal loan; and auto purchase loan. These loans are easy to access by young people and first jobbers.

But it said the loan that is most likely to deteriorate into bad or nonperforming loans are car and motorcycle purchase loans, warning that it might pose risk to the country’s economic development.

The research also found that each of indebted person held at least three loan contracts with two financial institutions.

Statistics indicate that these loans run a 24% risk of turning bad, blaming the previous government’s First Car Scheme which contributed to many people taking out loans for cars and motorcycles purchases which realistically they were financially unable to cover.

Motorcycle loans are even worse as they run a high 37% of turning bad.

Attracted by the low down-payments for motorcycles most just abandon their vehicles when loan payments cannot be met, according to the research.

Easy access to loans make young generation in major cities over-indebted[at] - Thai PBS English News