The personal loan market in 2026 risks contracting by 3.4-4.2% if the war continues, pushing oil prices higher and impacting the cost of living for Thais. The second quarter of 2026 will be a key period to observe how much people change their behavior by tightening spending. Loans may shrink further, and borrowers unable to access formal credit might increasingly rely on informal lending. Meanwhile, Krungsri First Choice's new card approvals have fallen to 34-35% due to worsening financial histories among some customer groups.
Athip Sinpajeeghan, Chief Executive Officer of Ayudhya Capital Services Company Limited, which provides credit cards and personal loans under the Krungsri First Choice brand, revealed that the overall personal loan market in 2026 is expected to contract for a second consecutive year. In January 2026 alone, personal loans had already declined by 2% due to slowing economic activity and rising living costs.
Amid the ongoing war, increases in oil prices, electricity costs, and living expenses are expected to directly affect the mass customer segment, likely leading to reduced spending.
If the situation does not prolong, the personal loan market is expected to shrink close to last year’s rate of 3.4%. However, if the conflict continues, causing higher inflation, the personal loan market could contract sharply by up to 4.2%, marking the steepest decline since 2024. Additionally, if Thailand’s GDP turns negative and economic activity slows further, personal loans could shrink even more than currently forecast. It remains to be seen if the government will introduce new spending support measures, as none like the “Shop Dee Mee Khuen” program were implemented earlier this year. This has led those with purchasing power to delay spending decisions, with the impact of rising oil prices expected to become clear in the second quarter.
Since 2025, non-performing loans (NPL) on personal loans have decreased, but this is a negative sign because it reflects reduced outstanding loans, indicating fewer loans being issued and less borrowing overall. This raises concerns that people may increasingly turn to informal loans.
“Everyone assumes that when the economy is bad, people borrow more. But in reality, when the economy weakens, borrowing declines because those already in the system have options and financial knowledge. When they see uncertain future income, they start controlling expenses, leading to reduced loan usage frequency. Over the past two years, we’ve seen Krungsri First Choice customers trying to repay debts more,” Athip said.
The company continues to lend cautiously. Currently, the card approval rate has dropped to 34-35% from 38%, due to worsening financial histories of applicants and stricter regulations, including debt service ratio (DSR) limits and restrictions on the number of lenders per borrower. Meanwhile, card closure rates have not increased much, possibly because customers find it harder to get new loans.
The company aims to have 200,000 new customer accounts across all Krungsri First Choice products in 2026, a 10% increase year-over-year, and to grow new loan volume by 5% year-over-year. Although 2025 may have seen about a 1% decline, the company believes strategies to expand its customer base, targeting younger generations and first-time workers, as well as enhancing digital features—such as cash cards enabling easy online transfers and payments—will improve customer convenience.
For customers without access to financial services, the company remains ready to cooperate with the Bank of Thailand on the Your Data initiative, which uses alternative data for credit evaluation to broaden system access. However, they believe authorities may need to revise the interpretation of “income” beyond traditional financial documents to better accommodate financially underserved groups.
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