Poor Thais trapped in informal debt

Published: 18 Dec 2012 at 16.28
Online news:

The very many Thais who earn less than 10,000 per month, in both industry and in rural areas, are trapped in a cycle of usury debt and exhorbitant interest rates demanded by loan sharks, a university economist warned on Tuesday.

Narong Phetprasert, an associate professor of economics at Chulalongkorn University, said the problem of informal debt had moved up demographically, from farmers in rural areas to factory workers in the cities across the country.

About 14 million of the approximately 17 million daily wage workers in Thailand were in the private sector, he said, and 8-9 million of them earn only 8,000-9,000 baht per month, which is insufficient to meet today's high cost of living and raise their families.

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banmebkk
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Discussion 15 : 19 Dec 2012 at 09.3215
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PT's solution is to make lending easier so they can buy a car, house. Allow them to qualify for credit cards so they can spend first and pay later. Great policies by the PTP.
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jgriff
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Discussion 14 : 19 Dec 2012 at 02.2314
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But the finance minister thinks that if you get people into more debt they work harder. Problem fixed by his standard. :
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DutchToo
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Discussion 13 : 18 Dec 2012 at 23.1513
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If you have a low income and you need money, borrowing it is NOT the answer at all.

I see just to many Thai people who not know economic principles
When do the people understand you can spend money only one time?
You do NOT NEED an IPhone 5.
If you know you can never pay back the lown.
Get your money from somewhere else then the legal way is just stupid.

Increase salaries is even more stupid. Companies who know do business in Thailand go to Vietnam or Cambodja and soon to Birma.
Increased salaries will cause higher prices because everyone (even the SomTam Vendors on the street) wants to profit higher income.
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jacksprat
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Discussion 12 : 18 Dec 2012 at 21.3312
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I once knew a somtam vendor in my soi who got deeply into debt from simply borrowing money to buy her children new school uniforms. The interest was unbelievable, already several times the original amount. I helped her out more than I should, but finally decided to stop pouring money into a bottomless hole. The woman eventually disappeared upcountry, knowing she could never pay off the huge debt it had grown to. So just why don't the police go after these illegal loan sharks?
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ricoaj22
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Discussion 11 : 18 Dec 2012 at 21.3111
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Some very insightful posts here.
I think D1 hit the nail on the head, education on budgeting and saving money for a rainy day would do the most good, it might take a long time to sink in and there are probably a lot of bad habits to break, but why not try.
Unnecessary spending on luxury items such as pickup trucks / iphones etc can't be the wisest move for minimum wage families, but i see a lot of that day in day out
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dao
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Discussion 10 : 18 Dec 2012 at 21.1610
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How about teaching people to live withing their means and not drink gamble and buy things they cant afford .
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OldThaiHand
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Discussion 9 : 18 Dec 2012 at 21.139
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The product of a society that feels an unearned, unjustified entitlement to the good life driven by ingrained necessity to be better than their peers and gain extra "face".

Otherwise, why are office girls earning 8,000/month walking around with iPhone5s, or the male wasters in Isaan with no work or visible means of income driving around on brand new motorcycles?
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drsmith
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Discussion 8 : 18 Dec 2012 at 21.048
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Thai Loan sharks screwing the working class Thai. That is showing a real love of Thailand. Not! Worshiping money is the new religion in Thailand. Thai's will screw over their fellow Thai for money every chance they get. Sad to see Thai's bleeding the less fortunate but that is modern day Thailand.
The government and politicians set a poor example that corruption, extortion, and screwing over fellow Thai's is acceptable behavior. Thailand sinking further and further into the third world. Loan sharks paying how much tax? Zero? Imagine that!
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boons
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Discussion 7 : 18 Dec 2012 at 20.237
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Simply amazing. What we have here is a story of so-called "legitimate lenders" envying the business of the "illegitimate lenders". The solution that the "legitimate lenders" have come up with to solve the debt-crisis among the poor is a hefty helping of "new debt" from banks. What this will *not* do is help the poor and indebted. But what it *will* do is provide near-term windfall profits to Thailand's bankers (as opposed to Thailand's underground bankers). Debt is, and has always been, a means of oppressing and controlling. It is a form of modern day usury and slavery which is sold by silver-tongued, "respected" bankers.
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The Dark Side
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Discussion 6 : 18 Dec 2012 at 20.216
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D#2 How long you been here? The guy is correct in stating some real problems. Look around and if you are not in close contact with Thai families try and get there. Acohol, gambling and screwing around get too many Thai's in financial trouble.
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Poor Thais trapped in informal debt | Bangkok Post: business