Bank of Thailand Institutes Digital Personal Loans

A circular issued by the Bank of Thailand (BOT) on 15 September 2020 has introduced digital personal loans to Thailand. 

Under the BOT Circular Re: Criteria, Procedures, and Conditions for Digital Personal Loan Business Operations, licensed personal loan business operators may now offer digital personal loans, in which personal loans are provided and repaid via electronic channels. Loans which use cars as collateral are excluded.

Operators must adopt a digital channel for loan disbursement and repayment of interest or other fees incurred by digital loan services; such channels may include automatic debit and money transfers. Information regarding any expenses incurred by the use of digital personal loan services, such as interest and repayment schedules, must be disclosed to the customer through electronic channels as well. Furthermore, lenders must use an applicant’s “alternative data” (e.g. utility bill or phone bill payment records) in their assessment of the customer’s ability or willingness to make repayments. 

The maximum line of credit amount is THB 20,000, while the maximum credit term is six months. The maximum effective rate may not exceed 25 percent per annum. There are no restrictions on the purpose of the credit.

To offer digital personal loans, licensed personal loan business operators must submit an application to the BOT 30 days prior to commencing such activities, in addition to demonstrating that they can deliver a minimum viable product. New business operators who wish to operate a digital personal loan business may indicate their intention to conduct such business in their application for a personal loan license.

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