Tech-fuelled microlenders replace loan sharks

Target market: A worker weaves on a traditional machine in Narathiwat. An estimated 36 million Thais, including 28 million self-employed workers, have no access to formal bank loans and credit cards. — AFP

BANGKOK: Thailand’s household debt has spiralled to almost equal the size of its US$472bil (RM1.96 trillion) economy, yet millions of individual borrowers still struggle to access credit. For tech-driven microfinance companies, that crunch represents a multi-billion dollar opportunity.

Lenders are offering loan approvals via smartphones and artificial intelligence within minutes for amounts as low as 2,000 baht (US$60 or RM248.69) to borrowers with no credit history.