More families in Southeast Asia sinking into debt

"From Phnom Penh to Bangkok, a growing share of mainland Southeast Asia's economic story is no longer about exports, investment or factory growth, but about households borrowing simply to get by. What was once sold as financial inclusion is curdling into financial stress, analysts say, as years of easy credit, weak wage growth, and inadequate public services have left millions of households dangerously exposed."

"Cambodia is at the center of the crisis. The country's credit boom lifted the private debt-to-GDP ratio from 24.2% in 2010 to 134.5% in 2023, one of the region's sharpest expansions. That boom is now colliding with a softer property sector, border disruptions with Thailand, and new US trade restrictions."

"According to Cambodia's Credit Bureau, as of December 2025, the average outstanding personal loan per borrower was around $6,500 (5,665). The garment-sector minimum wage is $208 per month."

Mainland Southeast Asia's economic growth narrative has shifted from exports and factory expansion to household borrowing for survival. Cambodia leads the crisis with private debt-to-GDP rising from 24.2% in 2010 to 134.5% in 2023, while average personal loans exceed $6,500 against garment-sector wages of $208 monthly. Thailand's household debt reached 86.8% of GDP in 2025, Malaysia 84.3%, and Myanmar faces chronic debt struggles. The debt composition varies by country: Malaysia's borrowing focuses on housing and vehicles, while Thailand relies heavily on personal consumption loans. Financial inclusion initiatives have transformed into financial stress as years of easy credit, stagnant wages, and inadequate public services leave households vulnerable. Concerns mount that household debt could trigger broader financial instability across the region.

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