In an effort to address persistently high household debt that’s been hindering economic progress, Thailand’s government has rolled out new support initiatives for non-bank debtors. On Tuesday, the cabinet sanctioned relief measures, including reduced interest rates and payment terms, said Deputy Finance Minister Paopoom Rojanasakul in a statement.
Included in the approved package are soft loans amounting to 50 billion baht available for non-bank financial institutions over a three-year period. These funds aim to provide debtors with some relief, featuring a 30% reduction in installment payments and a cut of 10% in interest rates for up to three years.
The assistance targets specific loan categories, covering car loans up to 800,000 baht, motorcycle loans up to 50,000 baht, and personal loans not exceeding a total credit limit of 200,000 baht. For borrowers facing default with debts up to 5,000 baht, a repayment of just 10% is required to clear their debts.
This initiative comes on the heels of previous measures aimed at tackling household debt, which reached a staggering 16.34 trillion baht (approximately $480 billion) by the end of September—constituting 89% of Thailand’s GDP, one of the highest ratios in the Asian region. Out of this debt, 65.4% originated from banks, while the remainder was attributed to non-banks.
Finance Minister Pichai Chunhavajira highlighted the need to lower the household debt ratio to 70% of GDP, as the current high debt levels have impeded government strategies to stimulate Southeast Asia’s second-largest economy.
