Thai Finance Ministry Dismisses Claims of Widespread Pico-Finance Licence Returns

Officials confirm Non-Performing Loans are declining and new micro-lenders continue to join the system, refuting reports of mass exits

 

Thailand’s Ministry of Finance has firmly denied recent reports of a mass exodus of provincial-level micro-finance (pico-finance) operators surrendering their operating licences.

 

Pornchai Thiravech, Director-General of the Fiscal Policy Office (FPO) and spokesperson for the Ministry of Finance, stated that such information could be misleading, affirming that no unusual pattern of licence returns has been observed.

 

Pornchai explained that the pico-finance loan policy, launched in 2017, aims to broaden access to formal financial sources for small-scale borrowers and to encourage informal creditors to operate legally. 

 

As of May 2025, there is a net cumulative total of 1,155 active pico-finance operators across 75 provinces. Furthermore, by the end of the first quarter of 2025, over 5 million loan accounts had been cumulatively approved, amounting to a total sum exceeding 50 billion baht.
  

Addressing concerns regarding Non-Performing Loans (NPLs), data as of 31st March 2025 shows that NPLs in the pico-finance sector stood at 23.40% of outstanding loans. 

 

This represents a slight reduction compared to 23.69% recorded in the same period last year (31st March 2024).

 

Pornchai clarified that the annual interest rate for pico-finance, capped at 36%, reflects the inherently higher risk and operational costs involved in lending to individuals who typically lack access to conventional financial institutions.

 

Regarding the return of operating licences, a total of 106 operators have surrendered their licences since 2017 up to May 2025.

 

The primary reasons cited for these returns were the economic impact of the COVID-19 pandemic in 2020 and subsequent personnel shortages.

  



 

Crucially, however, Pornchai emphasised that each year, the number of newly issued licences consistently outstrips the number of those returned, leading to a continuous expansion in the overall number of regulated operators.

 

"Since 2017, economic conditions and market competition have consistently required business operators to adapt," Pornchai said. "The Ministry of Finance, as the regulatory body, is currently reviewing and adjusting relevant regulations to permit pico-finance operators to extend their service areas to provinces adjacent to their head offices. This initiative will provide small-scale borrowers with even greater access to formal financial sources."

(2025/06/13-00:00)