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Pico-Finance is Thailand’s formal micro-lending framework, introduced in 2017 to bring “loan sharks” into the regulated sector. Likewise to broaden credit access for low-income, small-scale borrowers. Pico finance Market Trends Under this scheme, licensed Pico Finance operators (provincial-level credit firms) make unsecured or collateralized loans (typically up to THB 50,000 per person, or THB 100,000 for specially certified “Pico Plus” firms) to individuals in the province where the lender is based. This is a list of Pico finance market trends in Thailand. Likewise see the pico license in Thailand as well as the pico finance Thailand web pages. Lastly also see the article that we wrote on picofinance.
These limits and the interest rate cap (36% per annum, to reflect high risk and operating costs) are set by the Ministry of Finance. (By comparison, smaller “nano-finance” licenses allow loans up to THB 100,000 with a 33% cap.) In practice, pico loans fill a gap for rural residents, informal-sector workers and micro-entrepreneurs who lack collateral or formal credit histories. This forms pan integral part of Pico finance market trends.
A licensed pico-finance lender counting cash for small borrowers in Thailand. The eligibility rules require operators to be corporate entities with at least THB 10–15 million in paid-up capital and to conduct business at their registered province. Borrowers must reside locally and have stable income. The loans can be secured or unsecured; if secured (up to THB 50,000), the all-in rate cap is 36% (higher for smaller, riskier loans). These tight controls aim to ensure responsible lending.
The Pico-Finance regime is governed by the Ministry of Finance (specifically the Fiscal Policy Office) under a 2017 ministerial announcement. The law defines pico-credit as “provincial retail credit under supervision,” distinguishing it from bank lending and other non-bank personal loans. Pico finance market trends show us that key features include:
Initially, each pico lender could only serve borrowers in its home province (head office location). (Regulators have recently moved to relax this, permitting adjacent-province lending to ease convenience and liquidity)
These rules were explicitly designed to shrink loan-shark lending, by capping rates and formally licensing what had been an informal network. The Ministry even prohibits pico operators from simultaneously holding other supervised personal-loan licenses or nano-finance licenses. In sum, the framework creates a regulated “smallest-scale” finance tier: above nano-finance (≤THB 100k, 33% cap) and below conventional hire-purchase or bank lending.
Sector Growth: Licenses and Operators Since the regime’s launch in 2017, the number of pico licenses and operators has surged. The finance ministry reports that 1,414 new pico-finance licenses were issued from 2017 through mid-2025. Although 106 firms have returned or surrendered their licenses since 2017. The net growth remains strong. In fact, Ministry officials emphasize that “each year, the number of newly issued licences consistently outstrips the number of those returned,” yielding a continuing expansion in licensed operators.
For example, there were 47 new licenses vs. 18 returns in 2023, and 40 new vs. 22 returns in 2024. As a result, by mid-2025 the sector had over 1,150 active operators nationwide. The Ministry’s data (May 2025) cite 1,155 active pico-finance operators across 75 provinces. (The slight discrepancy with the 1,414 issued vs. 106 returned suggests that some licensees may be inactive or in process, but in any case about 1,300+ are on record.) By comparison, the World Bank noted that as of June 2021 there were 956 pico-finance providers licensed. (That report also counted 71 nano-finance and 1,414 leases providers.) from the key pico finance market trends.
Thus in roughly four years (2021–2025), pico operators grew by over 40%. Key licensing trend: roughly 40–50 new licenses per year versus a few dozen surrenders. In practical terms this means more trained micro-lenders are entering rural markets each year – not retrenching. Regulatory initiatives (discussed below) are also aimed at encouraging expansion, such as easing geographic limits. Together, the license data indicate a robust growth phase: a relatively new industry still adding operators and formally channeling credit that formerly lay outside regulated finance. This is accordance with out key Pico finance market trends.
Pico finance market trends shows that the rapid licensing growth has translated into a massive rollout of small loans. Ministry figures (March 2025) show that over 5.08 million pico loans had been approved since 2017, with a total principal of ~THB 50.06 billion. In other words, roughly THB 50 billion (about USD 1.4 billion) has been disbursed in tiny loans to low-income Thais over the program’s life. Nearly 400,000 of those accounts (≈7.4 billion baht) remained outstanding at end Q1 2025. This means the cumulative active loan book is around THB 7.4 billion.
Stacks of Thai baht coins, illustrating the aggregate loan capital extended under the pico-finance scheme. This volume translates to an average loan size around THB 20,000–30,000 (as other reports suggest) – a small fraction of conventional personal loans. By bringing millions of borrowers onto formal records, pico-finance has dramatically extended financial inclusion in Thailand’s provinces. Many of these borrowers would previously have had no credit or dealt with unlicensed lenders charging exorbitant rates. The value of THB 50 billion (over 5 million loans) underscores the opportunity: pico lenders are supplying affordable credit at scale to underserved individuals.
In industry terms, a market this size is still new. For perspective, Thailand’s economy is about USD 600 billion, so pico-loans are a small slice. But the growth was from zero in 2017 to USD 1.4 billion in disbursements by 2025 – a striking acceleration of microcredit deployment. According to secondary analyses, by 2023 pico lenders had issued over 553,000 loans and THB 12.6 billion (an earlier milestone), so the movement to 5.08 million loans in 2025 shows sustained momentum.
Pico operators are geographically focused on rural and suburban areas. Initially each license was tied to one province, so the expansion of providers meant more communities gained access. For example, by mid-2025 operators were present in all 75 provinces (out of 77 in Thailand). The Finance Ministry has highlighted plans to allow cross-border lending (to adjacent provinces) to further broaden access. This recognizes that many villagers live near provincial borders and might still face distance hurdles. (Such policy tweaks also help individual lenders reach a larger client base, reducing liquidity tightness on small institutions.)
Pico finance market trends in short, the market trend is expanding coverage. Year by year, more provinces see licensed pico outlets. This is evident in growing provincial license counts (Bangkok, Nakhon Ratchasima, Khon Kaen, etc. have seen especially high applications). Even during the COVID-19 downturn (2020–21), when some firms exited (reportedly for pandemic losses), new entries continued to surpass closures.
Officials note that economic strain (fewer borrowers paying) and staffing shortages caused most of the 106 license returns to date, but no unusual spike in exits has occurred. Instead, the trend-line remains upward in total operators.
With billions lent, the key concern is loan performance. By design pico finance serves higher-risk borrowers, so defaults are expected to be relatively high. Indeed, data show non-performing loans (NPLs) near a quarter of the book. As of 31 March 2025, the Ministry reported an NPL ratio of 23.40% of outstanding pico loans. This is only marginally better than the 23.69% a year earlier, indicating the situation is high-risk but stable. In other words, about one in four baht lent is (or soon will be) unpaid.
This high NPL rate reflects the segment’s nature: borrowers lack collateral or credit histories, so losses are intrinsic. To compensate, the law allows 36% interest (vs. ~7% in big banks, ~20% for credit cards). The Finance Ministry and experts emphasize this high rate includes risk premium. One official noted that at 36% cap, lenders must still manage credit quality carefully or face a “spiralling” of NPL. In practice, providers tell regulators they are focusing on training and collection to improve repayment.
Trends in NPL: The latest data (Q1 2025) show a slight improvement from 2024, but broadly NPLs have hovered around 23–24% for the past couple of years. This suggests the market is not collapsing (as rumor had it), but it is under pressure. If NPLs rise much further, small lenders risk insolvency. To mitigate this, the Finance Ministry is reviewing rules (like allowing branch out-of-province loans and better underwriting) and even considering measures similar to asset-management companies for bank NPLs. The sector itself (via TDRI researchers) warns that without adaptation (bigger data use, stronger collections), smaller firms may exit.
Overall, the risk appetite is evident: lending to unbanked customers at high rates. The statutory interest cap is higher than virtually all other formal loans, recognizing the need to cover defaults. Nevertheless, regulators and lenders stress responsible lending. Industry advisers have pushed for better credit scoring (big data) and legal tools to make debt collection less cumbersome. In the balance sheet, the combined picture is: huge social outreach (millions of tiny loans) but significant credit risk, requiring vigilant oversight.
To summarize the industry’s trajectory from 2017 to 2025 from the key Pico finance market trends, key annual data include:
Loan volume: Starting essentially at zero in 2017, cumulative approved loans surpassed 1 million accounts by 2022 and 5.08 million by Q1 2025. (This implies roughly 2–3 million new loans per year in 2023–2025.)
Loan value: Cumulative disbursements reached ~THB 50 billion by early 2025. Outstanding principal grew to ~THB 7.4 billion by March 2025.
NPLs: Ranging ~23–24% in 2024–2025. At the program’s start, figures are not publicly reported, but likely lower in absolute terms (since total loans were smaller).
Licenses: Total issued licenses climbed 100+ per year (peak ~141 new in 2020 when interest caps were implemented, then 40–50 new annually thereafter). Annual license returns have been in the teens or low 20s. Net active operators grew from 0 to ~1,155 by mid-2025.
Geography: By 2025, 75 out of 77 provinces have pico providers, up from 5 provinces in 2017 (when launched). The distribution is still uneven (urban and certain populous provinces have more firms), but the network has become nationwide in coverage.
The opportunity of the pico-finance sector is clear: formalizing microcredit. Decades of studies show microloans can help microentrepreneurs invest in livelihoods (e.g. inventory, tools) and smooth consumption. By channeling formal loans (under consumer protection and transparent fees), the policy likely saves many households from exploitative moneylenders. Each year billions of baht flow into villages rather than underground lending rings, broadening the formal financial system’s reach. For Thailand’s economy, boosting small rural businesses and incomes also supports GDP from the ground up.
However, this comes with significant risks at scale. Nearly 25% of loans are non-performing – a very high ratio. If unchecked, rising defaults could bankrupt small providers, forcing consolidations or bailouts. Indeed, analysts warn that the Pico market may consolidate: stronger firms will adapt (e.g. by leveraging new tech or data), while many smaller ones may exit. The Ministry is acutely aware: regulators are reviewing rules (licensing, loan terms, debt collection) to balance growth with stability.
Monitoring metrics like NPL rates and capital adequacy will be crucial. For now, the regime’s statistics are encouraging in one sense – defaults are not skyrocketing out of control, but trending mildly downward. Combined with the fact that licensing continues to expand, this suggests the sector is still viable. It will be important, however, for policymakers to keep supporting best practices: encouraging credit scoring, diversifying products (e.g. savings or insurance), and ensuring operators have the capital cushion to weather bad debts.
In summary, the key Pico finance market trends shows that since 2017 Thailand’s pico-finance market has grown explosively from zero to over 5 million loans worth ~THB 50 billion. The number of licensed operators rose from none to over 1,150 firms by mid-2025. Each year 40–50 new micro-lenders enter while only 10–20 exit, so the sector remains on an upward trend. These small loans are reaching underserved borrowers across virtually all provinces. At the same time, the sector carries heavy credit risk: roughly one-quarter of loans are already non-performing.
These statistics together highlight a dual narrative: on one hand, billions of baht are being directed to people who lacked any formal financing, a major step for financial inclusion. However, the high NPL ratio and relatively volatile economics of rural lending. It show the risks inherent with rapid microfinance expansion. For policymakers and stakeholders. They have come to the sense that the opportunities being legal as well as data-driven lending to the poor. All the while containing the risks and ensuring lender solvency and consumer protection. The evidence from 2017–2025 suggests the Thai pico-finance experiment has succeeded in jump-starting microcredit, but its future hinges on careful management as it grows. This is the report on Pico finance market trends om Thailand.
Sources: Official Thai Finance Ministry and Fiscal Policy Office data, as reported by The Nation and industry analyses, supplemented by expert commentary and legal/regulatory descriptions. (Figures through 2025 are drawn from government releases and industry reports cited above.)
