Thailand's household debt was the third highest in Asia-Pacific in the third quarter of 2016, driven by the heavy load of first-jobbers' personal loans, say researchers at the central bank's think tank.
"Thailand's [debt-to-GDP] ratio was recorded as one of the highest in Asia-Pacific, and at the same level of developed countries, but the ability to repay back might not be at similar levels," said Sommarat Chantarat, head of the financial systems section at the Puey Ungphakorn Institute for Economic Research (PIER).
According to the Bank for International Settlements (BIS), Thailand's household debt-to-GDP ratio in the third quarter of 2016 was 71.2%, trailing only Australia at 123% and South Korea at 91.6%.
The BIS's debt-to-GDP ratio calculations were based on smaller base of total debts while the ratio calculated by the Bank of Thailand was higher at 79.9% at the end of 2016.
Mrs Sommarat said despite the high debt-to-GDP ratio, only one-third of Thais have access to loans, citing a study, "Thailand's Household Debt through the Lens of Credit Bureau Data: Debt and Delinquency".
The study was based on National Credit Bureau data of 19 lenders in Thailand with combined loans outstanding of 9.8 trillion baht, accounting for 87% of all loans.
Mrs Sommarat said Thais have low access to mortgages, with only 4% of the Thai population having taken out a mortgage.
"Only 10% of Thais in their early 40s have mortgages, which is very low compared to the US where 40% of the population over 40 have mortgages," Mrs Sommarat said.
She said only 9% of Thais have credit card debt, significantly lower than the 63% of the population in the US.
"As seen from the data, policies to improve access to loans for investment or housing are crucial but need to be focused on people who are able to repay debt," she said.
Atchana Lamsam, head of networking and communications at PIER, said that in contrast to mortgage and credit card loans, Thais have better access to personal loans but also tend to default more, especially younger borrowers.
Ms Atchana said that 17% of the Thai population takes out personal loans, with 30% of first-jobbers aged 25-35 having taken out personal loans.
She said 20% of first-jobber debtors defaulted on their personal loans, higher than 15% of all Thai debtors who defaulted on their personal loans.
Ms Atchana said higher default rates were seen in the North, the Northeast and the South.
"Financially vulnerable groups and areas warrant close monitoring as they could affect the stability of the financial sector," she said.