Business Daily: Thailand’s Debt Spiral

Host: Ed Butler (BBC World Service)
Date: October 12, 2025

Episode Overview

This episode of Business Daily delves into Thailand’s escalating consumer debt crisis through voices from rural villagers, street vendors, private moneylenders, and international economists. With Thailand facing some of the highest rates of household debt in the world, the episode explores the personal stories of debt, the rise and practices of informal lending, systemic weaknesses, and potential solutions for the spiraling situation.

Key Discussion Points & Insights

1. Life on the Edge: Rural Debt Stories

• Location: Ban Phu Yuan, a poor rural village roughly 100km north of Bangkok, sets the scene for the episode.
• Villagers are seen collecting scrap metal and working multiple jobs to make ends meet.
• Passive income is a necessity:
  “Everybody has to find passive income, looking for additional jobs to earn more money… Everyone's working all the time.”
  — Villager/Trader (03:09)
• Stagnant wages and rising costs make profit elusive even for industrious street traders, who often earn mere cents per item sold.

2. Hopelessness and Relentless Cash Flow Concerns

• Villagers express a lack of hope for financial improvement, constantly chasing daily cash flow to cover debts rather than saving for the future.
• “We can’t ever hope to save any money.”
  — Villager/Trader (03:31)
• The emotional toll of this financial treadmill is palpable, with hope reduced to covering another day’s debts.

3. Pandemic Fallout & Structural Causes

• Corinne Delasha (IMF, Asia-Pacific Desk):
  Thailand’s high debt-to-GDP ratio was “already high before the COVID pandemic,” but worsened when the tourism sector closed down and mass borrowing became survival.
  — (04:15)
• Elevated debt causes a vicious cycle: higher risks make banks pull back on lending, dampening economic activity, and further eroding borrowers’ ability to repay.
  “So it’s sort of a vicious circle.”
  — Corinne Delasha (04:31)

4. Turn to Loan Sharks & Informal Lenders

• Many villagers, unable to secure formal loans, turn to private “loan sharks” for quick credit, often at exorbitant rates.
• Terms are typically 20% interest for a monthlong loan:
  “When you borrow 100 baht, you have to pay back 120 baht for 36 days.”
  — Loan Borrower “Ball” (07:16)
• On default, social coercion is strong—most people will make every effort to repay, with severe social and sometimes physical consequences for delinquency.
• Ball recounts having to borrow after an accident left him unable to work and pay hospital bills, now struggling with impairments but still driving a motorbike to get by.
  — (06:07–07:42)

5. Profile: A Moneylender’s Paradox

• J A Natterin, a local figure, was once herself on the run from loan sharks during pregnancy—at one point hiding in the mountains to escape harassment (10:07–10:34).
• She now lends to others, calling it a form of “helping people.” Though technically illegal if unlicensed, informal lending fills a critical systemic gap. “So I help everyday people who doesn’t have food, medicine, they want some work, seeds and helping people. Public service like helping people.”
  — J A Natterin (11:15)
• Her rates are 400 baht interest monthly per 10,000 baht borrowed (approx. 20%) with borrowers often rolling debts month to month.
• Enforces repayment primarily via intimidation and aggressive words—her online videos have made her both notorious and somewhat of a celebrity. “I never use violence against the physical, but violence for word, of course I did.”
  — J A Natterin (13:06)
• She was raided and accused of being a loan shark, but avoided indictment.
  — (15:00)

6. Lending Legality, Social Protection, and Financial Literacy

• Corinne Delasha (IMF):
  • Informal lending is illegal; authorities aim to incorporate more borrowers into the formal system, considering data such as utility bill payments.
  • Social protection is insufficient, especially as over half the workforce is informal, with precarious income and little safety net.
  • Financial literacy is low, leading many households to over-borrow and pay only minimums, letting debt snowball.
    “Having a social protection floor that’s more uniform and protects those groups... would help a lot in terms of preventing this borrowing, reacting to shocks, and... less costly to the government.”
    — Corinne Delasha (17:16)

7. Lived Realities and Possible Solutions

• Opinions in the village are mixed: while some resent moneylenders, others see them as fair and necessary given the absence of government support.
  • “What the government can do is that they open a center or institute that provide money for informal workers... this is why people gaining more and more debt because they don’t know how to get money.”
    — J A Natterin (18:22)
• For many, debt is not a choice but a necessity when medical bills or school fees arise unexpectedly.

8. Majority in Debt: No Exceptions

• The episode closes with the stark image of a villager shouting out to his neighbors—they all answer “yes” when asked if they're in debt.
  “Actually, they say, who's not? Who's not?”
  — Villager (19:30)

Notable Quotes & Memorable Moments

• “All I hope for is cash flow each day to cover my debts. We can’t ever hope to save any money.”
  — Villager/Trader (03:31)
• “It’s among the highest [household debt to GDP] across the world... This level of debt is sufficiently high that it has delayed the post-Covid recovery.”
  — Corinne Delasha (IMF) (04:15 and 04:31)
• “I borrowed 5,000 Baht a month ago, more than a month ago, but I still don’t have time to pay him yet. I just hope for cash flow each day.”
  — Loan Borrower “Ball” (01:29, 07:27)
• “If I point out at someone and start shouting... I will be like angry and aggressive. Are you going to pay or not? ...And they would be afraid of that and try to find some money to return me. So it works for me.”
  — J A Natterin (13:43)
• “Debt is not a choice…”
  — J A Natterin (18:22)
• “Actually, they say, who’s not? Who’s not?” [in debt]
  — Ban Phu Yuan Villager (19:30)

Key Timestamps

• 01:00 — Ed Butler introduces the debt theme and rural voices.
• 03:09 — Villager describes need for multiple jobs.
• 04:15–04:31 — Corinne Delasha (IMF) on Thailand's household debt.
• 06:07–07:42 — Ball narrates his troubles with debt and informal lending.
• 10:07–13:33 — J A Natterin’s story: from debtor to moneylender.
• 15:35–17:16 — IMF insights on formalizing credit and the social safety net.
• 18:22 — J A on her view of necessary systemic reforms.
• 19:21–19:30 — Universal indebtedness in the village.

Tone

The episode is empathetic, candid, and sometimes starkly personal, capturing the everyday desperation, systemic failures, and ethical gray zones of Thailand’s rural debt spiral. The inclusion of both borrower and lender perspectives, as well as expert analysis, paints a nuanced picture of a nationwide challenge still searching for lasting solutions.