BANGKOK: For all Thailand’s efforts to make it easier for low income earners to buy their own home, state employee Nattawut Khampak is braced for another knock back from the same bank that turned down his mortgage application two months ago.
Living with his wife, son and parents, plus his brother’s family in an overcrowded, wood and concrete house in a modest Bangkok suburb, the 36-year-old clerical worker has natural reasons to keep trying for a home loan. “I want to have my own home and have more kids,” Nattawut told Reuters. “It’s not easy to get one these days as the economy is bad.” His tale of rejection is commonplace, regardless of a government scheme that includes state banks offering relaxed mortgage conditions for the low paid.
Thai households are among the most indebted in Southeast Asia, and the country’s banks are rejecting around half of mortgage applications. Easy credit made available by a civilian government that was toppled in a coup nearly two years ago left behind a 10.84 trillion baht ($309 billion) mountain of consumer debt.
Equivalent to 81 percent of GDP, it presents a massive obstacle for the ruling junta as it tries to spark life into a moribund economy. The cabinet is expected to hear a finance ministry proposal next week for the roll out a 70 billion baht ($1.98 billion) soft loan programme for lower-income first-home buyers.
But, government Housing Bank Chairman Surachai Danaitangtrakul has already deemed the scheme launched five months ago to help the low paid a success. After suffering his first rejection, Nattawut, employed by the government under a four-year contract, will need to see a change of heart by his bank before he’s convinced.
“The bank asked for many documents and said my pay was little and my job insecure,” he said. “I applied for it again.” He earns 20,000 baht ($570) a month and is seeking a 2.5 million baht ($71,245) mortgage. He says his wife runs a grocery shop and earns at least 60,000 baht a month, but doesn’t have the financial statements that banks want before granting a home loan.
