BANGKOK, Thailand – The Bank of Thailand, the Fiscal Policy Office, the Thai Bankers’ Association, and three microfinance providers have launched discussions on creating a risk-based pricing system for loan interest rates. The framework seeks to balance borrowing costs with risk levels and expand access to formal lending channels.
The model would link interest rates to borrowers’ credit scores. High-risk borrowers, often reliant on informal lenders, could enter the formal system and begin building credit histories with the National Credit Bureau, opening the door to better loan conditions over time. Low-risk borrowers would benefit from lower interest rates in recognition of strong repayment records.
Implementation options are under review, with initial testing likely to take place in a regulatory sandbox, allowing financial institutions to test the system in a controlled environment before it is introduced nationwide.
The project falls under Reinvent Thailand: New Dynamics for the Future of the Thai Economy, a program developed to tackle structural issues in the financial sector. Discussions centered on removing barriers that limit credit access and encouraging the design of products tailored to different levels of borrower risk.
Officials and industry representatives agreed to work closely to move the project forward, with the goal of making credit markets more inclusive while ensuring the long-term stability of the country’s financial system. (NNT)
