Improved access to credit urged in Thailand

Thai experts wants reduction of people's dependence on loan sharks be pushed on to the national agenda.

They urged agencies to promote easier credit access in the formal banking sector.

Justice Ministry permanent secretary Kittipong Kittayarak told a seminar on "Informal Debt Crisis: Solutions for Thai Society" that loan sharking was an old problem that was difficult to solve. It is not just a question of poverty, but also about equality of income distribution.

The recent seminar was organised by the ministry.

Reducing indebtedness to underground lenders needs collaboration and integrated implementation by the public and private sectors and civil society, Kittipong said.

The best solution is to allow people easier access to formal funding sources such as banks.

Sirirat Chumuppakan, director of the Provincial Affairs Bureau, said the Ministry of Internal Affairs had previously attempted to address the problem of loan-sharking at its roots.

Twatchai Yongkittikul, secretary-general of the Thai Bankers' Association, urged relevant agencies to help people understand the deceptions made by loan sharks. At the same time, people should not overspend and thereby find themselves needing to borrow.

Banks should lower interest rates to allow some people to get access to formal loans, he said.

"If we can get innocent people out of the informal-debt cycle, I think the problem will be reduced. There will remain a real indebted group. Informal lenders who do not have morality should be punished by laws," Twatchai said, suggesting that welfare should be provided for those in financial trouble.

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