According to the government’s estimates, there are about 200,000 informal lenders in the country, many of which charge excessive interest rates, creating an unfair burden for borrowers. The government and relevant agencies have tried to reduce such illegal loans with various schemes such as the above-mentioned non-bank services.
There are 2 groups of service providers that require licenses: commercial banks licensed under the FIBA, and non – bank service providers licensed under the Notifications of the MOF. No license fee is charged for any of the licenses.
For Non – bank service providers, there are three types of license, as follows: License for Personal Loan under Supervision (P-Loan). This is to provide loans without collateral to an individual, without a specific purpose, or with the purpose of buying goods and services for private consumption, or to use for business operations. License for a Retail Loan for Occupations under Supervision (Nano Finance). This is to provide loans up to Baht 100,000 to an individual, without collateral, to use for business operation purposes. The total interest, fines, service fees, and charges shall not exceed 36% per year (effective rate). License for Provincial Retail Credit under Supervision (Pico Finance).This is to provide loans with or without a specific purpose to an individual seeking to borrow up to Baht 50,000, with or without collateral. The total interest, fines, service fees, and charges shall not exceed 36% per year (effective rate).
The FBA restricts a number of business activities conducted by foreigners, including service business activities (List 3 (21) of the FBA). Foreigners are strictly prohibited from engaging in such restricted businesses, unless a foreign business license is obtained. P2P businesses are restricted under List 3 (21) of the FBA.
According to the statistics from the BOT’s website, the total amount of loans given to households at the end of the fourth quarter of 2016 was Baht 11,472,712 million. Of the total amount, 43 percent came from commercial banks and 10 percent came from credit card, leasing and personal loan companies.
There is no publicly available information on the market share of each company.
Currently there is no specific law that governs P2P lending. However, the Announcement of the National Executive Council No. 58 grants the MOF the authority to prescribe P2P lending as a service under supervision, and a license is required to provide the service.
Athistha (Nop) Chitranukroh
Piyanuj (Lui) Ratprasatporn