Life in Thailand Poll No.2 (Financial discrimination)

[sjpthsuk]

IMO if your in a foreign country the last thing wanted is a financial loan of any kind as you just don't know when the Bank or the Country will decide to call on these, I don't know what a persons rights would be here, but don't think they would be anything like back in the person's home country.
That said i can see the need for such things, but i find in some respects that the banking system here although reasonably modern, has some archaic rules. To be honest until reading this post today, i never knew a foreigner could get a loan from a Thai Bank. I had been told a long time ago by an old expat buddy that the banks never gave expats money - just goes to show how mis-informed i was.

I do disagree with the double standards thing - one price for them, one price for us, this really is a major issue for my Thai wife who invariably argues with the people about it. Having worked around a few countries also (Saudi, Venezuela, USA, Canada, South Korea, Russia, Angola, Indonesia, Australia and Singapore) the only country that was worse than here was Saudi Arabia where there it used to be an Arab price, TCN price & Expat price - when buying fruit at the side of the road i'd always let the Saudi buy his first, then tell the vendor i wanted the same as the Arab, wait until he got it, and hand over the same money, and walk away.

I don't think things will change here, as they all like to get one over on the foreigner, it's like a challenge to them - recently i had a friend staying and instead of waiting for our tuk-tuk driver he decided to take one from Soi hilton back to the house, they charged him 1,000baht, initially they asked for 600baht so he handed across the 1,000 only to be advised "no change" and guy drove off. He relayed the story to us, and we talked to the Tuk-tuk we use and he said he heard the other guy when he came back bragging to the others about it. That sort of thing i have no time for, but it's like a game to them here, and they don't understand how it affects them and others...

Where else in the world would you find a bar-scene going through a very very poor low season and increase prices to ensure they made same profits as last year - this used to happen regularly in the Thai bars in Pattaya, and they could not see the down side to it. (I don't know if this happens in HH or not, as i don't frequent the bars here).

[GLCQuantum]

I have been quite lucky really I think...

During my 7 years here I haven't yet been ripped off to date and only encountered the double pricing system a few years back when I took the girlfriend to Pala-U waterfall. The guy at the gate wanted 300 (I think) then I looked at the board, written in Thai, and noticed it was 40 baht for Thais. I spoke politely to him, in Thai ,explaining how I worked here and he gave me the 40 baht price - No arrogance, nothing. Just a smile and waved me off.

This said I haven't ever made any major purchases here so maybe things would be different. A house - nope! A car - nope! A shoddy little room - Yep! A Bicycle - Yep! A better life than I could ever have dreamed of back in the Uk - Yep!

Just to add (In regards to how I got off with the Thai pricing at Pala-U).. My life here would be nowhere near enjoyable if I couldn't speak Thai. On a daily basis it helps an enormous amount and I sometimes sit and wonder what life in Thailand would be without it - A massive pain in the arse I bet.

[jimmy40]

I think i have been pretty lucky, i can speak little thai. But i have not had much of the two standard price thing. I have been here 1.5 years i think now, and i am well known. I even get cheaper drinks at certain pubs. So i think its how you come across, being a tourist type or a long term type. I treat everyone as i would like to be treated. Theres good and bad everywhere, but i think the good far outways the bad here imo

[GLCQuantum]

^

Well said that man

[playboy]

I am agreed with you GLC Quantum about speaking the country you live the language. I was in several countries in Europe and I found out that I like better this or that countries than other one, not only how nice it is but also how I can communicate with them in their native languages.
About getting ripped off, well we (thais) also get thai ripped off and not one but several times too.
About double standard price, I don't agree with it but isn't that if you make more money in your countries, you pay more taxes than people who made less money?

[Super Joe]

Basically, I still find this one of the most annoying things here, not just the duel pricing system and the attitude behind it, but when it comes to a lot of other things too like a high street bank will only lend a foreigner 70% mortgage if he works in Thailand and only 50% if works outside Thailand, regardless of the fact that if you were Thai on the same salary then they would be throwing money/credit cards at you etc.

This isn't 'dual pricing' or 'financial discrimination', it's 70% LTV because it's a 'non-residents home loan' you're referring to, Bangkok Bank offer resident Thais a maximum of 80% just as they offer 80% to resident foreigners, the gripe is more re: immigration laws/PR and stuff. Like it or not we're high risk when we have to leave the country next Friday should our work end/be terminated. Or in a few months should we divorce, 10% less is a pretty good deal considering. And I can't see it can just be put down to an immigration issue, even if we didn't have to leave and could work 'permit-free' we are still high risk borrowers in general as we all know how hard it is to find work here once it ends, Thais walk out of job Friday and into a new one Monday.

These stricter current lending policies for foreigners and Thais stem from reforms post-1997, foreigner's have abused the system (as usual) when it was more relaxed and only have ourselves to blame. The country was nearly crippled by non-performing loans that froze up the banks in 1997 (sounds familiar) when foreigners (and Thais obviously) done a runner from their financial responsibilities in the 1997 crisis.
.
Quote:
Thailand's weak financial sector played a major role in triggering the economic crisis in 1997. The banking and financial sector has been practicing unsound lending activities, replete with inadequate or no collateral, low bank capital requirements, and misallocation of funds. Compounding the problems were an extremely lax regulatory framework, including inadequate supervision and a lack of transparency. The result of these problems was the near collapse of the financial sector in Thailand. 56 finance firms closed by the end of 1997, and 6 banks were nationalized. The remaining banks were in frail condition, saddled by 2.73 trillion Baht in nonperforming loans (NPLs), equal to nearly half of all lending.
.
Seeing as Thailand brushed aside the global credit crisis to record economy growth of 8% last year I'd say their actions answer the question about whether they're better off with their current lending controls, and probably have a question of their own... 'have farangs really not learnt their lesson this time around?'. Scary as hell aren't we, I believe there's very good reason why Thais never take a blind bit of notice of us. I think it's ok for us to keep making the same mistakes recession after recession but labelling people racist and xenephobic because we can't make them repeat them, is a little off. Weirdos.

Banks 'discriminating' against us by not wanting to take our money clashes with the old 'Thailand only wants us for our money' thing, we may not know it or care to admit it but the opposite is true in respect to foreign investment, Thailand is actually the most open and liberal of all it's regional 'Tiger Cub' competitor's Malaysia, Indonesia, Philippines plus the other lesser economies like Vietnam and Cambodia. It welcomed more than these nations last year just as it has in total over the last 30 years. When America, European nations and Japan stop practising protectionism of certain business sectors and lifts their restrictions on 100% foreign ownership perhaps Asian nations will heed our wise words.

I marked "Not Sure" because I don't think most tourists notice or even care about the dual pricing. It's only us expats that seem to get upset by it and I don't think there are enough of us to matter to Thailand.

Totally agree. You usually hear complaints of 'dual pricing' and 'financial discrimination' from town centre bar stools where farang establishment's practise financial discrimination against Thais refusing entry if they're carrying th enormal drink they'd have in 99% of the bars here. Roughly translating to... "Sorry you can't come in if you're only going to order a few mixers as financially you're not worth the effort and you'll just waste our staff's time (which we do not compensate anyway because we do not believe in the minimum wage) or any wage for that matter... but if you're willing to order drinks you wouldn't normally do, and can't really afford to order, then please take a seat sir. If not please get your peasant backside out of here'

And we wonder why they're not interested in our tales of woe about that 20 Baht to spend 8 hours in a national park

SJ

[Spitfire]

Ah, well SJ, the text you quoted from my post may seem ambiguous on the duel pricing point but was referring to other things (primarily day-to-day things), not houses. Perhaps I could have worded it better.

And, BTW, while we are on the subject of houses, then how come I come across Thais that earn 15-20k a month getting 100% (plus 'build-in' extras if they want which pushes it over 100%) mortgages then? Is it because they are government service or something and allowed to borrow themselves into the next world? That hardly seems risk free to me either.

Many Thais, including government service types, have no actual CASH to go into say buying a 2 million baht house, whereas I have to come up with 600k baht deposit but earn 2-3 times the amount they do and have lived and worked here with a work permit for a decade.

I reckon that that could easily qualify as financial discrimination, and we've hardly even mentioned credit cards and the process to get one.

Guess that was more the point really.


Edit - You are correct about Bangkok Bank only giving 80% I think, along with Kasikorn too. However, do not think that is the case for SCB and Ayudhya/Krungshri though anymore. Think things have changed at a few banks as the government keeps doing these politically popular low-cost mortgages from the govenment bank (pink one I think).

[cozza]

I dont always believe the double standard price for foreigners is as clear cut as a "dual" pricing system. Those of us with Thai partners would know that when we are together buying a product and our Thai partner is doing the purchasing, that they can still be overcharged. This happened recently with my wife (actually I wasnt there, but my 2 y.o old daughter was) when getting a quote from a builder. When the builder saw my half-caste daughter he walked away and came back with a stupid quote. I asked my wife, why...I mean, she is local, speaks local dialect/accent and seriously knows better than to accept a stupid quote. I asked her why they would over charge her, I dont understand??? She replied that many Thai girls with a western husband/partner are poor and this is usually the assumption...the girls also feel special that they may have come into some real money and throw money around like it grows on trees, showing "face" and making themselves look like they are rich or higher classed.

I think there are factors that dont always fit with my understanding of the way a typical westerner from a developed country thinks. Like was said previously, the higher class dont always think too highly of Thai women with western partners.

I voted "Yes'. While I can see benefits for us, I cannot see any benefits for Thailand.

[Homer]

There is a parallel between financial discrimination in Thailand and computer software. In software development we distinguish between a bug (program does not perform as it's creators intended) and a feature (program is functioning fine - if you don't like it it's your problem). Financial discrimination is a feature of an expat's life in Thailand. One can accept that or go tilt at windmills.

I would say that inequality and class divides are pretty rampant in the west, too. America has the greatest economic gap between top and bottom.

Not even close to being true. Check out http://en.wikipedia.org/wiki/List_of_co ... e_equality for five different measures of income inequality. The second paragraph, the one in italics, explains how to sort the table on a column.

The most widely used measure of index inequality, the GINI index was created by a leading fascist theorist and ideologue who wrote The Scientific Basis of Fascism in 1927. Gee, you think the index might have a built in bias?

[Super Joe]

while we are on the subject of houses, then how come I come across Thais that earn 15-20k a month getting 100% (plus 'build-in' extras if they want which pushes it over 100%) mortgages then? Is it because they are government service or something and allowed to borrow themselves into the next world? That hardly seems risk free to me either.

Quote SCB: Maximum credit of 100% of appraised value for a maximum 30-year term.
My wife just got an 75% LTV mortgage for a property, I estimated she recieved 60% LTV as it's all fiddled in their appraisal valuation.

I just spent 15 minutes looking at 3 bank websites and everyone of them jumped out the computer screen yelling 'discrimination' Thai on Thai, do you simply choose to ignore this when you see it? The only outwardly 'discriminative' practices on view are between upper class/wealthy lot and the rest of us peasants as they offer DIFFERENT interest rates to each 'class group' (which I personally think is right, I'd rather lend my money to a doctor than a tuktuk driver). At least you was offered the same rates as Thais just lower LTV%, you/we should have been offered a far lesser rate imo as we are high risk borrowers in several ways, one we are only here temporary (no matter you've been here 10 years or 50 years), and another reason is you are not providing them with any security if you're buying a house, Thais will be securing the property against the loan. Reading between the lines here unless you have changed to a condo, the mortgage you are referring to is not yours or with you as a co-borrower, but your wife's mortgage with you as a guarantor, or have I read that wrong?

Kasikorn:
- The primary borrower must earn THB15,000 or higher per month, (10,000 Baht or higher per month for government officer, State Enterprise Officer).

Krung Thai Housing Loan for Government Officer & Ministry of Defence employee:
- Housing loan with lease agreement as securities provides you special low interest rate and additional 10% of Permsuk loan amount.

KRUNGSRI Home Loan for Doctor Group:
- Healthcare professionals enjoy a privileged home mortgage package.
- Preferential interest rates if you apply for a home mortgage loan of THB1.0 million and above.
- Only for healthcare professionals, including physicians, dentists, veterinarians and pharmacists.

So are Krungsri bank racist and xenephobic when it comes to Thai non-peadiatricians?

They are practising 'dual pricing' between Thai and Thai with these rates, although I don't personally see it that way. A doctor earning say 60k/month gets better prices than a Thai hotel owner making 1 million Baht/month, which is about who they feel will be the best customers risk wise, nothing to do with race just business decisions. If a tsunami, red-shirt protest, recession comes then the hotelier could go bust, doctors are employed forever.

Many Thais, including government service types, have no actual CASH to go into say buying a 2 million baht house, whereas I have to come up with 600k baht deposit but earn 2-3 times the amount they do and have lived and worked here with a work permit for a decade. I reckon that that could easily qualify as financial discrimination, and we've hardly even mentioned credit cards and the process to get one.

Banks will have 2 million Baht's worth of securities registered in their favour with Thais, this will be zero with a farang if we're talking about a house.


The stuff about Thais overcharging tourists or expats where they can is just too petty and hypocritical to me, when we far wealthier nations stop overcharging our tourists or old ladies when it comes to new roof tiles then we're entitled to preach poorer nations imo. Oh that's right, they do it much more... the old 'he's more of a thief than me, i only stole 2 car radios, he stole.....


SJ

[Spitfire]

Ok, Gary Mac with Excalibur, if you say so.

Hmmm......

[Spitfire]

Well, as a closing comment on this, there are many that are enamored with how things are in many fields here, and officially many things are supposed to be so in a certain way, along with net searches of such subject etc, but.....in reality......it doesn't necessarily translate into reality on many subjects in many places of the good kingdom, local officialdom and bending/interpretation of many rules are highly open to interpretation along the lines of local official/ corporate convenience etc, sure I'm not giving most any breaking news.

If everything worked out/went along the lines of official law and Internet quotation etc, then it would be a whole lot easier but I think it doesn't work out like that, especially once you get outside suburbia.

I think that if you are rich, then it can all be circumnavigated to your benefit for a price, and I'm sure many that post are in a position to benefit from this situation.

However, in general, perhaps viewing it as a rose tinted free zone is a good idea.

[Super Joe]

If everything worked out/went along the lines of official law and Internet quotation etc, then it would be a whole lot easier but I think it doesn't work out like that, especially once you get outside suburbia.

Capture-2.jpg (62.47 KiB) Viewed 660 times

It doesn't work like that you think, they publish the home loan interest rates on their website, Mortgage Lending Rate (MLR) +1.30% for doctors, and MLR +3.125% for the rest of us plebs. Do you think that when the doctor, or Government officer turns up at the bank they tell them they can't really have the 1% option it's 3% really, we just put that up to make the farang's feel less cheated. And seeing as you've felt it neccessary to throw in 'internet searches' and 'reality' digs then fine, let's discuss realities. I've posted the reality of my wife's mortgage details, I'd be interested to hear how you was offered a mortgage on a house. Have you changed your nationality lately

I think that if you are rich, then it can all be circumnavigated to your benefit for a price.

Agree, that was my main point it's all about money not the colour of our skin, bankers aren't fussy and the class divide is alive and well here with all this nonsense about 'preferential rates' for doctors and government officials, and 2% that's a hell of a lot. There's more dual pricing and financial discrimination at play between Thai and Thai than us, we've just a bit of a persecution complex about it. I'm around certain other people a lot of the day and hear their business coming and goings, and when there's a Thai customer/enquiry and the first thing is always whether they're rich with loads of money etc. Pricing is then done accordingly. If it's young farang traveller types in string vests then they get cheaper prices. The motive is money, not colour.


SJ

[poosmate]

The discrimination being discussed by the bank is not being read properly. The method of interest applied to the mortgage is 1.30% for doctor group. MLR MINUS 3.125% for the others. The current MLR is 7.25%. In year 2 and 3 the doctor group pays MLR -0.75% and for the rest of the loan term whilst the others pay MLR -1.25% and after year 3 MLR -0.25%.
Although there seems to be a big difference over the term of the loan it is in fact quite small.
The banks in my experience are no different to banks anywhere and will offer incentive and higher interest rate to customers who place more money with them regardless of race. The banks only see the colour of your money Even in banks here I have found there is some manager discretion allowed for in published rates and discounts are possible.
when I first came to Hua HIn 8 years ago commented on how refreshing it was that markets generally charged the same for all. Excepted are tourist areas where ( as in all countries) 'get what you can' always applies( ice cream and taxis in London). This goes for all including Thais.
I have not experienced racial discrimination. I have experienced a higher price being charged as I was perceived to be ignorant of the usual price.When this was cleared up I was generally charged the normal rate or even sometimes lower( the seller like to keep face)
The buy and sell culture here is different to the transparent pricing we are used to back home generally and it is seen as a game to get the best price by Thais. If we learned to play the game we too would maybe make our shopping trip 'sanuk'. Or we could just complain and continue to be paranoid.

[margaretcarnes]

A fair bit of comment has gone on here about the class divide effect, and yes, almost every other country does have a class system.
What differs about the Thai class system IMO is that they often don't aspire to move up. Those who do, by whatever means, can never quite fit or be accepted by the HiSo's who were born to it.
It's much more of a 'we know our place and so do those above us - it's how things are meant to be.'