Government Initiatives to Address Debt Challenges in Thailand
The Ministry of Finance and the Bank of Thailand are set to collaborate with major credit card companies to rejoin the programme, aiming to benefit both customers and companies in the long run. This move comes as part of a series of debt restructuring initiatives being implemented by various financial institutions in Thailand.
One such initiative is being carried out by the Government Housing Bank (GH Bank), which has offered debt restructuring for 80,000 households struggling with repayment. This includes extending repayment periods up to 80-85 years to reduce monthly payments, with over 50,000 participants already signed up for the scheme.
In addition, the Bank of Thailand has been urged to discuss with commercial banks the possibility of extending housing loan repayment periods, as houses are considered appreciating assets. According to financial experts, debt restructuring is expected to reduce non-performing loan (NPL) ratios for banks, prevent bad debtor records, and ultimately benefit the overall economy.
Furthermore, concerns have been raised regarding vehicle debt, particularly for pickup trucks and motorcycles that are essential to livelihoods. Increasing defaults and shrinking new car loans due to higher risks have prompted relevant parties to be summoned to report their solutions at an upcoming meeting.
The Ministry of Finance is also addressing the debt issues of the Student Loan Fund (SLF), with plans to recalculate debts according to new laws. Currently, 170,000 individuals have overpaid, totaling 2.1 billion baht, which the government will promptly refund. Another 2 million individuals are having their debts recalculated, amounting to 54 billion baht.
Moreover, the Interior and Finance ministries are working to integrate informal debts into the formal system. The finance ministry is developing innovative solutions to address these systemic debts, with clearer results expected soon.
Government spokesman Chai Wachirong stated that the Prime Minister has directed the Bank of Thailand to work with commercial banks to establish concrete credit card debt solutions within two weeks and inform the public accordingly. Additionally, efforts are being made to bring informal debts into the formal system, similar to the PICO Finance approach, by licensing informal creditors who wish to transition to the formal system.
Overall, these debt restructuring initiatives and collaborations between financial institutions and government agencies aim to alleviate financial burdens on individuals and businesses, ultimately contributing to the economic stability and growth of Thailand.
