The Finance Ministry plans to present to the cabinet a plan to address bad debts owed by 3.8 million small-scale borrowers with a total debt value of 120 billion baht.
According to a source from the Finance Ministry who requested anonymity, tomorrow the ministry will propose measures to address household debt, focusing on small borrowers with non-performing loans (NPLs) whose individual debt levels are less than 100,000 baht.
The goal is to help these people pay back their debts according to their repayment capacity, which may include extending the repayment period to significantly reduce their monthly instalments.
As part of the debt resolution plan, the ministry is expected to ask the cabinet to approve the purchase of these bad debts from commercial banks and non-bank financial institutions, transferring them to be managed by state-owned asset management companies (AMCs) such as Ari AMC and Sukhumvit Asset Management.
The first batch of bad debts to be transferred to state AMCs is estimated at 60-70 billion baht.
The source said the purchase price of these bad debts from financial institutions will be very low, with an estimated total spending of 10 billion baht.
Funding is derived from the remaining 26 billion baht under the government’s “Khun Soo Rao Chuay” (You Fight, We Help) debt relief programme.
Financial institutions have fully set aside provisions for these bad debts.
Of the total 120 billion baht in small-scale bad debts, roughly 1.4 million borrowers owe to commercial banks with a combined debt of 35 billion baht, while 2.4 million borrowers owe to non-bank institutions with debts totalling 85 billion baht.
Addressing household debt is a government priority and one of its five key pillars to be implemented within four months.
Chatchai Sirilai, president of the Bank for Agriculture and Agricultural Cooperatives (BAAC), said the bank has its own household debt restructuring policy.
The bank intends to separate and manage the bad debts of elderly borrowers aged 70 or older through BAAC’s own AMC. This group includes about 28,000 borrowers with total debts of around 5.5 billion baht.
In terms of managing these debts, he said BAAC’s executive team needs to propose detailed plans for the board’s consideration before implementation — such as debt restructuring options, allowing heirs to assume debts, the criteria for partial or full debt haircuts in certain cases, and proposals for government subsidies to support the debt restructuring process.
Thailand’s household debt has become a major obstacle to economic growth. According to the National Economic and Social Development Council (NESDC), the household debt-to-GDP ratio in the first quarter of 2025 was 87.4%, a slight decrease of 0.1% year-on-year, mainly due to tighter lending standards by financial institutions.
The NESDC expressed concern that stricter lending policies may push more people towards informal lending sources, worsening the household debt problem, especially as younger generations continue to favour “buy now, pay later” options.