Consumer Credit in Thailand

PROSPECTS

Efforts to control household debt may lead to more restrictive policies

The Bank of Thailand is working to control the country’s elevated level of household debt. It is possible that the central banks may introduce new measures to control auto loans, having found several marketing campaigns promoting eased criteria for auto loan approvals.

Banks promote spending by offering privileges

Banks are working to encourage credit card spending by providing privileges associated with particular consumer foodservice operators, leisure/entertainment companies or stores, such as offering additional credit points, discounts on prices for food and drink or cinema tickets, or cashback schemes. Meanwhile, some premium credit card issuers provide lounge access, priority parking and exclusive services for their high-value cardholders.

Higher interest rates expected

Although banks are working to boost credit card spending, interest rates are expected to continue to rise. According to the Bank of Thailand, consumers who are new to the workforce are expected to have increasingly high debts during the forecast period.

COMPETITIVE LANDSCAPE

New financial services app

In September 2019, Thai shopping centre operator, Central Group, joined forces with major Chinese online retailer, JD.com, to launch a new financial services app called Dolfin.

Krungsri Auto expanding range of operations

Bank of Ayudhya’s auto lending arm, Krungsri Auto aims to increase its total lending by 9% in 2019. In collaboration with many business partners across a range of sectors, including car manufacturers, car dealers, petrol station operators, insurers and e-marketplace providers, Krungsri Auto introduced a new business model ecosystem, Krungsri Auto Ecosystem at the end of the review period.

Focus on offering new technologies

Offering new, advanced technologies will be a key factor in consumer lending companies’ competitive strategies during the forecast period, especially as electronic devices and digital technology play an increasingly central role in consumer lifestyles. SCB M, a joint venture involving Siam Commercial Bank and The Mall Group, for example, enables cardholders to pay with their credit cards through a mobile app, and this wedding of conventional products with digital, particularly mobile, technologies is set to become a prominent feature of the forecast period.

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