The asset management company (AMC) planned to address the bad debts of retail borrowers will cover 3.8 million eligible debtors with a total debt value of 120 billion baht, according to the Finance Ministry.
Finance permanent secretary Lavaron Sangsnit said the new AMC will be established as a joint venture between the public and private sectors. The company will take over debts of up to 100,000 baht per debtor from financial institutions, then restructure these debts to make monthly repayments more manageable.
This should ease the burden on small borrowers, allowing them more disposable income for consumption, which in turn will help stimulate the economy, said Mr Lavaron.
There are 1.4 million small borrowers with commercial banks that owe a total of 35 billion baht, and another 2.4 million small borrowers with non-bank institutions that owe 85 billion baht.
He said the funding for the AMC to purchase debts from financial institutions will come from allocations by the Bank of Thailand. These funds originate from contributions commercial banks are required to make to tackle the Financial Institutions Development Fund’s debt problem.
During the pandemic, part of this money was used to support entrepreneurs under the “Khun Soo Rao Chuey” (You Fight, We Help) programme. Of the 36 billion baht allocated, 26 billion remains and will be earmarked to establish the AMC, said Mr Lavaron.
New Finance Minister Ekniti Nitithanprapas stated in parliament during the government’s recent policy announcement the new AMC for household debt restructuring will increase liquidity for Thais.
For example, he said borrowers previously making instalment payments of 2,000-3,000 baht per month to financial institutions may, after restructuring, pay only 500 baht.
The household debt resolution policy was dubbed one of the government’s five key pillars to be implemented within four months. Other policies include:
Stimulating the economy and tourism through the “Khon La Khrueng Plus” co-payment scheme, expected to launch at the end of October.
Providing liquidity support for small and medium-sized enterprises (SMEs) by having the Thai Credit Guarantee Corporation provide guarantees totalling 50 billion baht for businesses in the supply chains of large companies. If large businesses support SMEs under the “Big Brother Helps Little Brother” scheme, the Revenue Department will allow these expenses to be deducted from taxes.
Increasing personal savings for retirement by having the Government Lottery Office allocate part of its marketing budget to savings accounts for those who purchase online lottery tickets. Each buyer receives an individual savings account that can be withdrawn at age 55. This programme is separate from the “retirement lottery” scheme.
Developing workforce skills for future industries, including bio-agriculture, smart farming, artificial intelligence and digital technology, data centres and electric vehicles. The Board of Investment has a Competitiveness Enhancement Fund worth 10 billion baht that can be allocated in collaboration with the private sector to select workers for reskilling and upskilling.