Thailand is experiencing a continuous deterioration in household credit quality amid expanding household debt, which has risen to 86.7 per cent of national gross domestic product.
The secretary-general of the National Economic and Social Development Council, Danucha Pichayanan, revealed recently that total household debt had expanded to 16.44 trillion baht, rising from 16.31 trillion baht in the third quarter of 2025.
Personal loans grew by 4.24 per cent, but data from the National Credit Bureau (NCB) revealed consumer non-performing loans (NPLs) overdue for more than 90 days had reached 1.31 trillion baht, or 9.59 per cent of total loans, driven heavily by surges in personal and housing loans.
Red flag on youth behavior
Danucha drew particular attention to the consumption behavior of Gen Z. Social media platforms like YouTube, TikTok and Facebook have transitioned from entertainment spaces into major drivers of consumer spending.
A Visa study showed that 58 per cent of Thai youth trust online creator recommendations, with 50 per cent holding positive attitudes toward brands appearing on these feeds.
This environment accelerates debt accrual. NCB data demonstrated that the outstanding credit-card debt of individuals under 25 had shot up by 13.5 per cent and their personal loan debt by 11.5 per cent—the highest among all age groups.
Compounding this risk is the surge of financial influencers, known as “finfluencers”.
While they deliver digestible personal anecdotes that foster trust, many lack adequate financial expertise, or harbor hidden conflicts of interest and use disguised advertising in their content.
Consequently, they often feed incomplete or distorted information to their followers, leading to high-risk transactions and heavy debt burdens, according to Danucha.
Risks of online lending
The expansion of alternative lending frameworks also poses an immediate threat to youth. The Bank of Thailand’s push to introduce branchless commercial banks (virtual banks) relies entirely on digital footprints—such as transaction history, online retail data and mobile service patterns—to analyze creditworthiness.
Experts are calling for greater vigilance citing international case studies from China and the Philippines that show online credit services rapidly inflated consumer spending, trapping borrowers in severe debt cycles, resulting in higher NPL ratios than traditional brick-and-mortar entities.
Addressing these risks, Suporn Sunthornrohit, the CEO of Clicx Bank, Thailand’s first virtual bank backed by Krungthai Bank, AIS and OR, argued that digital entities could establish effective risk management.
By analyzing mobile service history and consumer spending behavior across their combined 50-million customer base, virtual lenders aim to gauge repayment capacities precisely and ensure more prudent digital lending practices.
The Pico Finance blindspot
A major structural loophole lies within the provincial retail loan business framework, known as Pico Finance. Supervised by the Finance Ministry’s Fiscal Policy Office, these lenders provide personal loans but are not members of the NCB.
Luxmon Attapich, CEO of the NCB, pointed out that because Pico Finance operators do not share records with the bureau, they lack historical insights into a borrower’s existing debts before approving new applications. To compensate for this credit risk, Pico operators charge higher interest rates than commercial banks.
Luxmon noted that Pico Finance operators find the reporting burden associated with customer accounts to the NCB a significant barrier. Encouragingly, some major online shopping platforms are actively applying for NCB membership to tighten their own risk protocols.
How to combat the crisis
Reflecting on the vulnerability of the youth, Luxmon emphasized that while young adults must borrow to buy necessary tools like smartphones or tablets for daily education and work, many fall behind in their payments due to non-essential lifestyle spending.
“Some youths also borrow money to purchase discretionary goods for less justifiable reasons, and this makes financial literacy incredibly important,” Luxmon stated.
A 2024 financial literacy survey revealed that while 72.6 per cent of Thais maintain decent basic financial habits, they lack the deep, conceptual understanding required to navigate sophisticated digital traps.
This deficit leaves them vulnerable to adopting dangerous advice from unregulated online sources including “finfluencers” without evaluating structural financial risks, according to Danucha.
“Thailand currently faces regulatory gaps in monitoring content from individuals who do not fall under the direct jurisdiction of the Securities and Exchange Commission (SEC). Therefore, prioritizing the regulation of financial content produced by finfluencers—such as making SEC registration and licensing mandatory—is highly essential,” Danucha suggested.
To prevent the crisis, some experts urge the integration of comprehensive financial education early in the school curricula to teach youth about peer pressure and digital spending traps.
Additionally, tightening institutional oversight is vital. In the wake of the 1997 Asian Financial Crisis, strict laws required traditional commercial and state banks to report all customer accounts to the NCB, enforcing systemic financial discipline.
Today, mitigating household debt may require expanding these strict NCB mandates to modern online lenders, closing regulatory gaps, and establishing rigid registration and licensing rules for finfluencers.
