THAILAND Law and Practice Contributed by: Jessada Sawatdipong, Sarunporn Chaianant, Supawich Nimmansomboon and Supawin Pongthananikorn, Chandler Mori Hamada
these developments and stand ready to deploy sta- bilisation measures if required. 1.3 The High-Yield Market Thailand’s high-yield bond market remains under pressure in 2024–25. Following earlier defaults and corporate scandals, the Securities and Exchange Commission (SEC) continues to enforce strict super- vision of speculative-grade issuers, including early engagement with companies facing repayment diffi- culties. Investor sentiment remains cautious, resulting in a decline in new issuance, with many corporates turning to bank loans or delaying fundraising plans. Real estate developer bonds are a particular area of concern, with maturities exceeding THB260 billion falling due between late 2025 and 2026. Regulators and market participants are considering measures to provide liquidity support or facilitate debt restructur- ing to mitigate systemic risks. While high-rated issu- ers continue to access the bond market successfully, lower-rated companies face challenges in attracting investor demand. 1.4 Alternative Credit Providers Traditional financial institutions, such as commercial banks and specialised financial institutions, continue to be the major credit providers in Thailand, especially when it comes to financing large corporate transac- tions. Non-banks and start-ups have become more prominent in the market for typical loans to individ- uals, such as personal loans and nano-finance. By having a more straightforward method for accessing loans with a less complicated process, such alterna- tive credit providers can be a more convenient option for individuals and retail customers. 1.5 Banking and Finance Techniques Digital Factoring Ecosystem In the past, SMEs were generally unable to access factoring transactions because factoring business operators were concerned about the unreliability of invoices submitted by customers and their requests for double financing on the basis of the same invoices. Using central web services (CWS) technology, the BoT launched a platform for digital factoring. By using the central database of the platform, it is possible to verify the invoices of customers to prevent double financ-
ing issues. In recent months, the platform has built confidence among factoring business operators, more of whom have agreed to enter into factoring transac- tions; this makes factoring a more readily accessible means of obtaining funding for SMEs. Peer-to-Peer (P2P) Lending Lending by an individual or a juristic entity to an indi- vidual can be done on a licensed electronic P2P lend- ing platform. The platform operator will act as an inter- mediary by matching lending and borrowing activities and arranging the execution of loan agreements. Fur- thermore, the platform operator will have to assess the borrower’s creditworthiness and client suitability, as well as procure the funds through a custodian or an escrow account. This method of lending excludes the administrative costs that normal financial institutions have to bear, and the platform operator will be able to eliminate sig- nificant costs normally charged to the borrower for similar services. Using this financing technique not only allows the borrower to access funds via a sim- pler and faster method, but also offers investors an alternative way to manage excess funds in addition to saving. Digital Lending Digital lending is a financing technique that allows licensed personal loan business operators to employ digital technology and alternative data as part of their credit risk analysis. It helps customers who may not have a regular income or sufficient assets to serve as collateral for a loan but may have other online informa- tion that proves their ability to repay a loan to access a source of funds. Business operators are urged to proceed with the borrowing and repayment processes through an electronic platform, such as wire transfer or electronic money, to create a digital footprint that will be useful for customers when it comes to future financial products and services. Crowdfunding Crowdfunding, either by way of equity or debt, can be performed through a licensed funding portal. A bor- rower or an issuer will have to submit a business plan to the funding portal, which conducts a screening pro- cess and discloses relevant information online. Inves-
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