BANGKOK. Deputy Prime Minister Anutin announces low-interest loans of up to 50,000 baht for borrowers with good credit outside the formal system. This comes amid growing concerns about the safety of lenders as a peak committee aims to curb informal debt and provide relief and legal protection to all parties.
Amid growing concerns about the extent of informal debt in the Kingdom as the number of creditors seeking help continues to rise, Interior Minister and Deputy Prime Minister Anutin Charnvirakul this week announced a new low-interest loan facility with amounts of up to ฿50,000 for borrowers with good credit ratings competitive interest rate of 0.75% per month.
This goes hand in hand with concerns about protecting lenders. Following reports of violence and intimidation, the government pledged to protect both sides of the country’s chronic household debt problem.
Anutin introduces a new low-interest loan for good informal debtors
Deputy Prime Minister and Interior Minister Anutin Charnvirakul, leader of the Bhumjaithai Party, heads the government committee seeking a solution to the country’s chronic fiscal debt problems. This week he announced a new credit facility for borrowers with good credit.
Significantly, Deputy Prime Minister and Interior Minister Anutin Charnvirakul unveiled a comprehensive plan to support borrowers outside the formal credit system to address the long-standing problem of informal debt.
The announcement was made on December 18, 2023. After weeks, a campaign begins in which over 105,000 distressed debtors have registered with his ministry for help. The recent news certainly underscores the government’s commitment to easing the financial burden on overwhelmed Thai households.
Loans of up to ฿50,000 for borrowers with good credit ratings are to be provided by state-owned banks as part of the solution to the household debt crisis
Minister Anutin announced that the government will provide loans of up to ฿50,000 to individuals with good credit ratings. This is provided outside of the traditional credit system. And the good news doesn’t end there.
The loans are offered with an extremely low interest rate of just 0.75% per month. It is a crucial step that should bring relief to many struggling with informal debt.
In a detailed interview, the Deputy Prime Minister explained the government’s strategy and the results achieved so far. He revealed: “The total debt registration for the past three weeks stands at 99,484, with a cumulative debt of 5,926 million baht.”
That number rose to over 105,000 loans with debt of over 6.5 billion baht as of December 21.
State banks are committed to helping solve the problem. The Budget Debt Committee, chaired by Anutin, is looking for a multi-pronged solution to the persistent problem
Encouragingly, Anutin announced that the state savings bank and the Bank for Agriculture and Agricultural Cooperatives (BAAC) are preparing to provide assistance. Banks provide low-interest credit lines. They will also work harder to ensure accessibility for those in need. The 0.75% per month loan offers significantly cheaper loans compared to problematic loan providers outside the formal system.
This initiative is part of a broader effort to address the informal debt crisis. The government recently established an informal debt management committee.
Mr Anutin, who chairs the meeting, stressed the need for a multi-pronged approach. He announced: “The meeting decided to appoint a subcommittee to oversee the resolution of informal debt problems, chaired by the Permanent Secretary of the Ministry of Interior.”
At this point, the Committee has identified three key areas to address the informal debt problem: debt settlement, law enforcement and financial assistance.
Concern for lenders with reports of violence. The government assures that their rights and contractual entitlements will also be protected in the new campaign
Currently, the minister assured citizens that protective measures would be taken, stating: “Rest assured that both sides will receive protection from the state. There will be no threats or damage to property.”
In fact, the current campaign has raised troubling questions about the rights of debtors. Some creditors, emboldened by authorities’ concerns about their predicament, have begun rejecting their financial obligations. In addition to the fear of moral hazard, this also poses a threat to law and order.
There are now credible reports of aggressive behavior by creditors and acts of violence.
The government is committed to reassuring lenders that authorities will also respect their legal and contractual rights.
Law enforcement agencies led by the Royal Thai Police will actively cooperate with administrative officials to protect the rights of debtors.
Deputy Prime Minister Anutin announces low-interest loans of up to 50,000 baht for borrowers with good credit outside the formal system. This comes amid growing concerns about the safety of lenders as a peak committee aims to curb informal debt and provide relief and legal protection to all parties.
Minister Anutin vows to crack down on illegal practices. Loans with interest rates higher than 15% per year are illegal and can easily be voided by law
On the other hand, the government will curb all illegal practices. Mr. Anutin warned that charging interest rates above 15% per annum would be considered invalid and illegal.
The Treasury will play a key role in providing financial support. The State Savings Bank and the Bank for Agriculture and Agricultural Cooperatives (BAAC) offer credit lines at favorable conditions.
The campaign addresses the urgent financial needs of those facing informal debt. The interest rate is between 0.75% and 1.5% per month, depending on the individual conditions.
As part of its efforts to resolve the informal debt crisis, the government is also explicitly committed to mediating between debtors and creditors. Anutin revealed: “Information on informal debt mediation across the country revealed that 1,294 debtors had joined the mediation process and 224 were successful in reconciliation.”
This success is due to the collaboration of various authorities and departments.
Incident in Nonthaburi in which a creditor was attacked and died while trying to enforce loan repayment. The registered numbers continue to rise
However, not everything is smooth sailing. An incident on December 15, 2023 highlighted the potential danger of the debt relief campaign and the need for vigilance.
Previously, the husband of a debtor, who had gotten into trouble because of debt collection attempts, was said to have driven his pickup truck into a creditor. It led to the death of the loan shark.
The incident occurred in Nonthaburi province.
In any case, Permanent Secretary for Home Affairs Suthipong Chulcharoen provided an update on the registration process on Friday. As of December 21, 2023, a total of 105,482 people were registered, with a total debt amount of ฿6,576 million.
Extent of the problem is still unknown
The government continues to emphasize parallel efforts and encourages citizens to register for effective debt brokerage and coordinate with local authorities.
The government’s efforts to raise household debt to pump 500 billion baht into the economy.
There are currently no concrete figures on the extent of the problem. Some estimate that ฿1 trillion in informal loans is outstanding in the country. This is credible considering that there are 3.48 trillion baht in loans issued by financial organizations outside the banking system.
Thailand’s total household debt is over 16 trillion baht, or 90% of GDP. Furthermore, many believe that the situation could be even worse with a stagnant economy.
2023-12-22 09:32:56
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