On September 15, 2020, the Bank of Thailand (BOT) introduced a new type of personal loan—the digital personal loan—under BOT Circular Re: Rules, Procedures and Conditions for the Undertaking of Digital Personal Loan Business. Key features of the new loans are as follows:

• Digital personal loans can be offered online by licensed personal loan business operators.
• The ability and willingness of customers to make repayments can be assessed using “alternative data,” such as utility and mobile phone bill payment records.
• The lender must use electronic channels for both the provision and repayment of the loans.
• The maximum loan amount is THB 20,000.
• The maximum loan term is six months.
• No restrictions are imposed on the purpose of loans.
• Combined interest, fines, and any other fees must not exceed 25 percent per annum (effective rate).

Personal loan license holders that wish to offer digital personal loans must submit an application and supporting documents, including information on their minimum viable product, for BOT consideration at least 30 business days prior to their planned commencement for offering digital personal loans. Digital personal loans cannot be offered until the application is approved, but the application requirement is waived if the provision of digital personal loans only uses traditional methods of assessing customers’ ability or willingness to repay their loans (such as the National Credit Bureau).

Business operators who would like to issue digital personal loans but do not currently have a personal loan license must first apply for one from the BOT in accordance with the requirements of BOT Notification SorNorSor. 12/2563 Re: Regulations, Procedures and Conditions for Undertaking Business of Personal Loan under Supervision. In practice, these business operators may apply for a personal loan license and simultaneously apply for BOT approval of their plan to issue digital personal loans.

For more details on this new loan type, or on any aspect of banking and finance law in Thailand, please contact Charuwan Charoonchitsathian at [email protected] or Teelada Rujirawanichtep at [email protected].