Bangkok: The Treasury Department has stated that it has not found any irregularities in returning licenses to picofinances. The Ministry of Finance has announced that none of the 1,155 picofinances nationwide have returned their licenses in an unusual manner. The department supports using pico finance as a mechanism to address the problem of informal debt, allowing for a 36% interest rate due to the associated risks. It also plans to review conditions for inter-provincial lending.
According to Thai News Agency, Mr. Pornchai Thiravet, Director-General of the Fiscal Policy Office and Spokesperson of the Ministry of Finance, confirmed that despite pico finance business operators rushing to return their licenses due to the impact of a 23 percent increase in non-performing loans (NPLs), there was no unusual return of licenses. Provincial-level retail loans under supervision, known as pico finance loans, have been a key policy of the Ministry of Finance since 2017. This initiative aims to expand opportunities for retail investors, especially those unable to access traditional sources of funds, to receive loans at fair interest rates, thereby reducing reliance on informal lenders.
The pico finance business also serves as a channel to support informal creditors transitioning to legally operating formal lending services. As of May 2025, there are 1,155 licensed and operating businesses in 75 provinces, excluding Sing Buri and Ang Thong. By March 31, 2025, there were 5,081,240 accumulated approved loans with a total credit line of 50,066 million baht, and 393,010 outstanding loans with a total credit line of 7,429 million baht. From January to March 2025, an average of 55,500 new loans were granted monthly, averaging a credit line of approximately 700 million baht per month.
The overview of NPLs in pico finance loans showed that as of March 31, 2025, NPLs accounted for 23.40 percent of outstanding loans, a slight decrease from 23.69 percent on March 31, 2024. The interest rate for pico finance loans is capped at 36 percent, reflecting higher risks and operating costs compared to standard loans, as these are provided to groups with high credit risk who cannot access traditional financial institutions.
From 2017 to May 2025, 106 pico finance business operators returned their licenses mainly due to economic challenges from the COVID-19 pandemic in 2020 and personnel shortages. However, the Fiscal Policy Office continues to receive new license applications, with the number of new licenses exceeding those returned, indicating a continuous increase in pico finance operators.
The Finance Ministry spokesman noted that the ministry is considering revising regulations to allow pico finance operators to expand their service areas to neighboring provinces where their head offices are located. This would provide retail consumers with more options for accessing funds at reasonable interest rates. The ministry also supports pico finance operators by providing knowledge about resolving informal debt problems and enhancing public relations to help resolve these issues in the country.