between debtors and operators. In this regard, operators must have a flexible credit-granting process according to the characteristics of the type of debtor (e.g. start-up businesses etc.). However, Nano Finance excludes loans originated from hire purchase, leasing, sale, and lease back of goods that operators sell during business, as usual as well as vehicles, machines, title loans, and travel loans for overseas employment.
The BOT has set the maximum allowable total interest, fines, service fees, and charges for the provision of the Nano Finance under the supervision at 33% per year (effective rate).
c. Provincial Retail Credit under Supervision (Pico Finance):
The MOF regulates the provision of provincial retail credit, called “Pico Finance,” whereby a business operator who wishes to provide Pico Finance must obtain a business license for these operations.
Pico Finance refers to the provision of loans, with or without assets or properties as collateral, to individual customers residing in the same province as the head office of the business operator. The requirements and qualifications of the business operator depend on the types of Pico Finance provided—for example, maximum loans of THB 100,000 (approx. USD 2,925) or maximum loans of THB 50,000 (approx. USD 1,462).
The maximum allowable interest rate for the loans varies depending on the credit limit of the loan and whether there is collateral. For example, in the case of a secured loan with a credit limit of up to THB 50,000 (approx. USD 1,462), the total interest, fines, service fees, and charges must not exceed 36% per year (effective rate).
Since 2019, the BOT has also regulated peer-to-peer (P2P) lending—a different finance business whereby the person wishing to operate the P2P lending platform must obtain a business license. In this regard, a P2P lending platform operator refers to a person who provides an electronic system or network for P2P lending, and a lender is a natural or juristic person who offers a loan through an electronic system or network (excluding crowdfunding providers).
So far, no business operators have obtained a license to operate a P2P lending platform in Thailand, according to the BOT website. Four peer-to-peer lending platform operators are currently testing their services in the BOT’s regulatory sandbox framework.
Additional comments regarding the legal situation for loan-giving-, factoring-, brokerage, finetrading-, and ancillary services or what FinTech’s must be aware of in this business area
The demand for loans has been steadily increasing for both individuals and businesses, which is a result of disruptions from COVID-19. The BOT is aiming to increase the efficiency in providing loans and lowering the criteria and interest to help business operators and individuals shore up their financial health.
Economic conditions
Market size for loan-giving-, factoring-, brokerage-, finetrading- and ancillary services and biggest companies in this business area
According to BOT records, as of March 2022, there are 144 P-Loan providers, which includes both non-collateral and secured cars; 46 Nano Finance providers; and 337 Pico Finance providers in Thailand. The number of loan providers is increasing as the demand for loans is higher. Information regarding the companies relating to market shares is not available to the public.
Additional comments regarding the economic situation for loan-giving-, factoring-, brokerage-, finetrading- and ancillary services or what FinTech’s must be aware of in this business area
As described above, the market for loan business operators in Thailand is large and competitive, and the demand for loans is anticipated to increase in 2022. Overall, the market for the loan business operato