BANGKOK – On Tuesday, December 12, Prime Minister Srettha Thavisin addressed how the government plans to tackle the debt crisis that millions of Thais are facing. He classified the debtors into four groups.
1) Debtors who became indebted during the COVID-19 pandemic. Srettha said this group of people who are no longer able to service the debt will be granted temporary debt moratorium so they can eventually start repayment.
The PM added he wants to help these people, numbering around 1.1 million individuals and SME companies, with the help of government savings bank and the government’s bank for agriculture and cooperative.
2) Those with regular income but can no longer able to service the debt. Srettha subdivided the group into two: school teachers and education staff numbering around 900,000 may seek help from Government Savings Bank by transferring the debt to the bank and to have the bank automatically deduct their salary at serviceable amount monthly but with at least 30 percent of their government salary remaining each month.
The second sub group are education staff and teachers who owed credit cards. Srettha said the debt reservice will be extended to 10-year period with interest rates reduced from 16-25 percent per annum to 3-5 percent.
3) The third group are those who earn irregular income such as farmers, those who made installation-based loan repayment and unable to honour the agreement and those taken government’s education loans. These people will be offered temporary debt moratorium, reduced interests rates and reduced minimum monthly debt payment so they can resume debt payments.
Srettha stated that 1.5 million farmers are already part of the government’s three-year debt moratorium. Also, 2.3 million people who borrowed money from the government to further their education will also benefit from the relief scheme.
4) The fourth group are those who have bad debt with government financial institutions and private assets management companies. The PM said three million people belonging to the group will be assisted through debt restructuring.
The PM added the Bank of Thailand will remind private financial institutions and banks to restructure the debt of those with persistent debt payment problem so they can start repayment. This, he added, can be done by keeping interest rate no more than 15 percent per year with the aim of clearing the debt within five years.
As for loan sharks, the PM said a crackdown would be launched against them after he announced the plan to solve the loan shark problem and declared that it was a “national agenda.”
“For me, the loan shark is modern-world slavery. This is the ‘new world slavery’ that robs people of their freedom and their dreams. This problem is too big to solve without the government as a middleman. We need to work with many sectors today: government officials, the police, and the Ministry of Finance to prevent people from falling into the same snare again,” he stated on November 28.
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