Thailand is currently facing a new, more significant problem than the structural economic issues previously encountered, as the Bank of Thailand (BOT) has discovered that about 45% of young people are taking their first loans through financial services from non-bank businesses (Non-Bank). This trend indicates a growing reliance on these entities among the younger generation.
They use money given weekly or monthly by their parents for allowances, dorm rent, or tuition fees in advance. This practice is known as BNPL, or Buy Now, Pay Later, which means "buy first, pay later." Exactly.
While these young people are about to enter the workforce and become the country's new labor force, many incur debt before even earning a real salary, creating financial burdens early in life.
Crucially, the young generation is largely unaware that buy now, pay later or deferred payment schemes often include excessively high hidden interest rates. The BOT has found that these interest rates and hidden fees range from 25% to 33%, and when adding fees through e-Wallets, buyers may face total interest and fees soaring up to 35%, which is highly unfair.
Vithai Ratanakorn, Governor of the Bank of Thailand, revealed that this issue is significantly worsening household debt. The BOT must urgently examine the practices of over 3,600 Non-Bank entities nationwide before implementing stricter regulatory measures in the fourth quarter of 2026.
These measures will focus on managing redundant, hidden, or compound interest and fees to protect retail consumers from exploitation.
More importantly, the BOT found that this sector has a large user base, with over 75% of personal loan accounts held by Non-Bank firms, representing 55% of the market debt, reflecting strong public reliance on these services.
Non-Bank businesses provide a form of financial service that benefits those without collateral or financial history, enabling broader access to everyday spending.
Significantly, these Non-Bank firms advertise low interest rates and installment plans up to ten months, but secretly charge multiple layers of compound interest. The BOT sees this as consumer exploitation, especially for those lacking sufficient financial knowledge, ultimately turning them into victims of unfair practices.
The Governor also disclosed that the Financial Institution Policy Committee (FIPC) has approved draft regulations to supervise "buy now, pay later" (BNPL) credit services. "Buy Now, Pay Later" (BNPL) regulations have been approved in principle.
However, the BOT will hold a public hearing in September 2026 to gather feedback for final adjustments before officially announcing the rules in Q4 2026.
The new regulations will require BNPL businesses to obtain specific licenses. Existing operators, numbering about six or more, must comply with licensing conditions to ensure transparent and fair lending standards.
Data shows BNPL businesses have grown tenfold over the past four years, with users increasing from 600,000 to 6 million.
A concerning point is that 45% of young people start their first debt with BNPL services, which are consumer loans. The BOT plans to issue new licenses restricting users to those aged 18 or 20 and above.
Additionally, interest rates will be capped between 15% and 20%, and loan amounts limited to 20,000 baht per person to prevent youth from over-indebtedness. A key condition is that once these regulations are in place, businesses must enter the licensing system; failure to comply means they cannot continue operating and must shut down.
"Currently, financial system risks do not lie solely with commercial banks or concerns about bank failures and deposit refunds. Part of the risk has shifted increasingly to Non-Bank entities, especially as this sector grows larger and more complex, now involving up to 24 different business models," Governor Vithai said.
Therefore, the BOT must change its approach and regulatory methods accordingly. Without intervention, this could become a major future issue, particularly regarding fairness in financial services.
The Bank of Thailand has truly evolved; it not only safeguards the country's financial stability but also firmly protects small individual consumers to ensure they receive fair treatment.