Call for measures to halt surge in bad debt

Quality of household credit is declining

- WICHIT CHANTANUSORNSIRI

The National Economic and Social Development Council (NESDC) wants to improve the conditions for debt restructuring to prevent special mention (SM) loans from deteriorating into non-performing loans (NPLs), after a noticeable increase in the former in last year’s fourth quarter.

Speaking during a briefing on the social situation for the first quarter of 2025, Danucha Pichayanan, secretary-general of the NESDC, said that in the fourth quarter of 2024, household debt totalled 16.4 trillion baht, showing a modest 0.2% growth compared to the same period last year. This slower expansion was largely due to tighter lending standards, particularly from commercial banks. As a result, the household debt-to-GDP ratio decreased to 88.4%, down from 88.9% in the previous quarter.

The quality of household credit also declined. The value of personal loans overdue for more than 90 days (classified as NPLs) in the Credit Bureau database amounted to 1.22 trillion baht, accounting for 8.94% of total credit, a slight increase from 8.78% in the previous quarter.

However, household debt classified as SM loans in the fourth quarter of 2024 increased to 4.17% of total household debt, up from 3.52% in the third quarter.