Thailand leads ASEAN in gold-driven financial growth, inclusion
Gold’s role in providing financial stability amid global uncertainties is gaining attention as the world moves into 2025.
Traditionally linked to prosperity and wealth in Thai culture, gold remains a symbol of celebration during significant family events such as weddings and birthdays. Despite societal changes, gold’s cultural significance continues to drive strong consumer demand in Thailand, evidenced by the nation’s leading growth in the ASEAN market for two consecutive quarters in 2024.
The pursuit of financial inclusion is a major policy objective globally, with gold playing a crucial role in this endeavour. By enabling access to savings, credit, insurance, and payment systems, financial inclusion fosters economic growth. When people are financially secure, they are more inclined to invest in or establish businesses, further bolstering economic development.
According to the World Bank’s 2021 Global Findex Report, 71% of individuals in emerging markets have bank accounts, while the global figure stands at 77%. This marks a notable increase from 51% in 2011.
Thailand excelled in this area, with 82% of its population having bank accounts since 2017. By 2021, this figure rose to 95.6%, with 67.1% having savings and 92% engaging in digital payments, outperforming the Asia-Pacific Economic Cooperation (APEC) averages of 82.1%, 61.4%, and 78.1%, respectively.
While access to bank accounts in Thailand is high, opportunities to expand financial services remain. Credit service access lags at 30.4%, below the APEC average of 38.2%, due to limited understanding and fear of rejection. In 2024, informal lending surged to 30%, raising concerns as borrowers often encounter interest rates above the legal limit of 15%.
Globally, there is a rapid adoption of initiatives to enhance financial inclusion, with retail banks in China, Singapore, the UAE, and Malaysia offering gold investment accounts. Turkish banks have introduced buy-back schemes, gold bonds, and gold cheques.
Financial growth
In Thailand, the government has digitised gold trading, allowing bullion traders to offer online savings and trading through the Pao Tang mobile app. This allows real-time trading of 99.99% gold at global market prices, increasing Thai participation in gold trading and modernising the market.
By the first quarter of 2023, the value of online gold savings grew by 60 to 70% year-on-year, with YLG Bullion International reporting a 70% increase in new trading accounts on the Pao Tang app. These platforms demonstrate how retail banking can complement traditional bullion dealers by expanding access to gold.
Gold has the potential to bridge financial inclusion gaps, particularly in underserved rural areas. It has long assisted rural Thais, who use pawnshops for credit to cover agricultural costs and unexpected expenses. In 2023, Thailand’s Office of Government Pawnshops reported loans exceeding 20 billion baht, with gold accounting for 88% of the 1.1 million pawned items.
During the 2020 pandemic, gold served as a financial safety net, with households selling 81.5 tonnes of gold bullion to secure financial relief. Gold’s dual role in meeting financial and cultural needs makes it a reliable store of value and a hedge against uncertainty, aligning with public policy objectives of maximising financial inclusion.
Research indicates that 61% of consumers trust gold more than currencies, 65% believe it retains value over the long term, and 67% see it as protection against inflation and currency fluctuations. By offering gold products, retail banks can enhance consumer relationships and strengthen their appeal.
Central banks recognise gold’s importance in reinforcing balance sheets, which enhances the banking system’s attractiveness. Gold’s enduring appeal yields notable returns, especially around the new year, with data from 1971 to 2023 showing an average January return of 1.79%, nearly triple the long-term monthly average, reported Bangkok Post.
As 2025 unfolds, gold offers a financial tool providing security and potential returns, contributing to a more resilient and inclusive economy for Thailand, despite potential uncertainties.
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