Govt to tackle 427bn baht in NPLs from consumers and credit card debtors

Deputy Prime Minister and Finance Minister Pichai Chunhavajira said the government would encourage commercial banks to address non-performing loans (NPLs) related to small-amount debts owed by consumers and credit card users.

Pichai stated that debtors in this group each owed no more than 100,000 baht to their banks, and these were non-collateral debts.

He added that these small-scale debtors had not participated in the “You Fight, We Help” debt restructuring programme and accounted for 35% of banks' NPLs. He noted that small-scale NPL debtors collectively owed approximately 427 billion baht to commercial banks.

The finance minister highlighted that Thailand currently has around 13 trillion baht in household debt, of which 1.22 trillion baht has become NPLs.

So far, the government has convinced around 50% of debtors who had defaulted on their instalments for no more than a year to join the “You Fight, We Help” programme. Most of these borrowers had secured loans against their houses or vehicles, Pichai said.

He explained that banks had already been attempting to assist non-collateral and small-scale debtors, but many debtors had not been responsive to their calls.

To address this, the government would encourage an asset management company to coordinate with banks and small-scale debtors, urging those with debts of no more than 100,000 baht to enter the debt restructuring programme.

Pichai added that the government would support the programme by covering operational costs. “I believe the government won’t need a large budget for this, as banks have already classified this group of debtors as NPLs,” he said.

The finance minister also stated that the government aimed to enrol debtors from the 1.22 trillion baht NPL category into the restructuring programme to clear their records with the Credit Bureau.

However, he noted that the process could not be completed within just three to six months and would likely take one to two years.