Determinants of Spending Behavior and Government Policies Affecting Household Non-Performing Loans in Bangkok Metropolis and Its Vicinity

Abstract

This research aims to study the determinants of spending behavior, demographic characteristics, and socioeconomic shocks affecting household non-performing loans (NPLs), as well as the impact of government policies on household NPLs in Bangkok and its vicinity. Data were collected via questionnaires from 443 respondents selected through multistage sampling. The instruments included measures of demographics, financial literacy, spending behavior, awareness, and policy participation. Data were analyzed using descriptive statistics and the Ordered Probit Model. Our empirical evidence reveals that 1) a critical behavioral gap exists, whereby respondents possess high financial literacy but demonstrate poor actual spending behavior. Spending behavior and awareness significantly reduce the probability of NPLs at the 95 percent confidence level, whereas unexpected economic shocks and being married or divorced significantly increase NPL risks; and 2) long-term structural debt-resolution policies significantly reduce the probability of NPLs, whereas short-term emergency measures exhibit a positive relationship with NPLs among vulnerable debtors. This study suggests that the Ministry of Finance, the Bank of Thailand, and educational institutions should promote practical financial literacy, shift financial institutions toward behavioral credit scoring, implement early warning systems, and prioritize long-term structural debt restructuring over short-term relief measures.