Farmers line up for help at the Samut Prakan branch of the Bank of Agricultural Cooperatives. Somchai Poomlard

Farmers’ debt has risen amid the pandemic as many struggle to repay their loans, with older farmers carrying higher debts, according to the National Credit Bureau (NCB).

In the first quarter of 2020 – when the pandemic hit Thailand – the total outstanding loans to farmers from NCB member financial institutions rose to 928 billion baht, from 479 billion in the fourth quarter of 2019.

Loans to farmers continued to increase throughout 2020, rising from 932 billion baht in the second quarter to 942 billion in the third quarter and to 949 billion in the fourth quarter, according to data from the NCB.

Surapol Opasatien, chief executive of NCB, said outstanding loans to farmers continue to rise in part due to accumulated debts that they have not been able to repay.

Elderly farmers – those over the age of 55 – have borne particularly high debt and are the largest subgroup among farmers.

The BCN classifies three groups of agricultural loans according to the age of the farmers. In the fourth quarter of 2020, the total outstanding agricultural loans among elderly borrowers stood at 417 billion baht, or 44% of the total agricultural loan portfolio.

Outstanding loans of farmers aged 46 to 55 was 339 billion baht or 35.7% while outstanding loans of farmers under 45 years of age was 193 billion, or 20.3%, according to data from the NCB.

With this scenario of rising lending, there is a risk that it will affect the country’s household debt, especially as Thailand becomes an aging society.

Despite a large number of loans from the Bank of Agriculture and Agricultural Cooperatives, many farmers have also borrowed from other banks and are also clients of commercial banks and non-bank companies, he said.

According to data from the BCN, the outstanding loans of elderly farmers stood at 372.25 billion baht in the fourth quarter of 2019 before the pandemic.

After the epidemic, the amount of loans among elderly borrowers increased to 422.54 billion baht in the first quarter of 2020. However, it declined slightly as part of the Bank of Thailand’s debt relief measures in 420.62 billion baht in the second quarter of 2020, 420.14 billion baht in the third quarter and 417.39 billion baht in the fourth quarter.

In view of the central bank’s debt restructuring program, the ratio of agricultural non-performing loans (NPLs) continued to decline. The bad debt to loan products ratio was 7.1% of the total farmer loan portfolio in the fourth quarter of 2019. The non-performing loan ratio continued to decline throughout 2020 to reach 5% in the first quarter. , 4.7% in the second quarter, 4.3% in the third quarter and 3.5% in the fourth quarter.

For all individual loan borrowers, Surapol said the NCB estimated that 5.97 million retail loan borrowers requested the central bank debt relief measures from first to last. the second phase from April 2020.

Out of a total of 5.97 million retail credit borrowers, 5.16 million were classified as normal loans in April 2020 and 87.59% of 5.16 million maintained the performing loan condition until February 2021.

At the same time, around 534,900 out of 5.97 million individual loan borrowers were classified as NPL in April 2020.

Some 65.3% of those 534,900 NPL borrowers were still in poor lending terms as of February 2021, while 30.3% were classified as having normal loans.