Brisk business for Thai moneylenders amid high household debt

[BANGKOK] "Business is great," said Aoy, a moneylender who charges a whopping 10 per cent monthly interest but finds plenty of takers in Thailand, where a huge pile of household debt is complicating the military government's efforts to revive a sluggish economy.

Thai households are among the most indebted in Asia, and the official figures understate the problem due to the large sums also owed to loan sharks - estimated at as much as US$74 billion.

When the army seized power on May 22 it justified the coup partly by the need to fix an economy driven to the brink of recession by seven months of political turmoil. But the growing debt problem leaves the central bank little scope to cut rates to support growth, while exports remain sluggish. Banks have tightened their lending criteria as an increasing number of loans have soured, so many Thais have turned to loan sharks.