No Unusual License Returns Observed
Thailand’s Ministry of Finance has dismissed reports suggesting a widespread surrender of pico-finance licenses by provincial micro-lenders. Pornchai Thiravech, Fiscal Policy Office Director-General, called such claims misleading, affirming that no significant trend of operators exiting the sector has been detected.
Pico-Finance Sector Thrives
1,155 Active Operators Nationwide
Launched in 2017 to expand formal financial access, the pico-finance program supports small-scale borrowers and legalizes informal lending. By May 2025, 1,155 operators were active across 75 provinces, with over 5 million loan accounts approved, totaling more than 50 billion baht.
Non-Performing Loans Decline
NPLs Drop to 23.40% in 2025
As of March 31, 2025, non-performing loans in the pico-finance sector stood at 23.40%, down slightly from 23.69% the previous year. This improvement reflects stabilizing conditions, despite the high-risk nature of lending to borrowers outside traditional banking systems.
High Interest Rates Explained
36% Cap Reflects Risk Factors
Pornchai noted that the 36% annual interest rate cap for pico-finance accounts for elevated risks and operational costs of serving underserved clients. This rate structure ensures sustainability for operators while providing critical financial access to small-scale borrowers.
License Returns Contextualized
106 Operators Exit Since 2017
Since 2017, 106 pico-finance operators have returned their licenses, primarily due to the COVID-19 economic fallout in 2020 and subsequent staffing shortages. However, new licenses issued annually consistently surpass returns, driving steady growth in the number of regulated lenders.
Regulatory Adjustments Proposed
Expanded Service Areas Planned
The Ministry is reviewing regulations to allow pico-finance operators to serve adjacent provinces, enhancing borrower access to formal credit. Pornchai emphasized that ongoing adaptations to economic and competitive pressures ensure the sector’s resilience and continued expansion.
