The government plans to allocate around 10 billion baht to address non-performing loans (NPLs) among individual borrowers, according to Finance Minister Ekniti Nitithanprapas.
He said on Tuesday the bad debts the government purchases will be transferred to Bangkok Commercial Asset Management (BAM) Plc and Sukhumvit Asset Management (SAM).
These agencies will help restructure the debts to reduce the monthly repayment burden for the public.
Regarding progress on the government’s plan to ease small-scale debt burdens, Mr Ekniti said the Finance Ministry, Bank of Thailand and related agencies were instructed to finalise the debt restructuring plan within one month.
In principle, the plan calls for the government to draw about 10 billion baht from the unused portion of the Financial Institutions Development Fund allocated to the “Khun Soo Rao Chuay” (You Fight, We Help) programme, part of a total fund worth 26 billion baht, to acquire NPLs.
The debts are to be purchased at a discounted price, which should not affect banks’ balance sheets as provisions for these bad debts have already been fully set aside.
As for the asset management companies (AMCs) responsible for purchasing the debts, several options were initially considered — including the establishment of a new AMC.
However, that option would take time so the government decided to assign state-owned AMCs such as BAM and SAM to handle the purchases.
Once the debts are acquired, the AMCs are to manage, restructure and reduce the debts and extend repayment terms to enable debtors to regain repayment capacity.
The AMCs are also expected to work on enhancing debtors’ financial potential so they can eventually qualify for new credit.
The household debt resolution policy is one of the government’s five pillars to be implemented over four months. Other policies comprise:
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 allows 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.