Nano-finance and pico-finance loans worth 70 billion baht in total are among the measures being deployed to counter informal debt problems, says Fiscal Policy Office director-general Pornchai Thiraveja.
Mr Pornchai said nano-finance and pico-finance form part of the Finance Ministry's efforts to widen formal financing sources for low-income earners and informal workers, helping them avoid loan sharks and encouraging underground lenders to enter the formal lending system.
With minimum registered capital of 50 million baht, nano-finance operators can lend nationwide, with a lending limit of 100,000 baht per borrower. The maximum charge to customers for interest, indemnity, service fees and other fees is restricted to a maximum of 33% per year.
According to the Bank of Thailand, 68 nano-finance firms provided loans to 2.05 million accounts, with total outstanding loans tallying 38.8 billion baht and non-performing loans (NPLs) totalling 2.58 billion baht as of Sept 30, 2023.
With minimum registered capital of 5 million baht, pico-finance operators can lend only in the province where they registered their operations.
These operators are restricted to lending a maximum of 50,000 baht per borrower. The maximum charge to customers for interest, indemnity, service fees and other fees is restricted to 36% per year.
However, so-called "pico-plus" operators are permitted to offer larger loans to borrowers, with a ceiling of 100,000 baht per borrower.
Such lenders are required to have at least 10 million baht in registered capital.
As of Oct 31 this year, applicants to provide pico-finance who were granted permission and began providing the service totalled 1,132 in 75 provinces. This figure excludes the provinces of Ang Thong and Sing Buri.
From December 2016 to September 2023, pico-finance firms lent a combined 36.4 billion baht to 3.79 million accounts, with total outstanding loans of 7.09 billion baht and NPLs of 1.6 billion baht.