Thailand’s debt relief plan heads to Cabinet
Packages will waive interest on NPLs and forgive debt on credit-card and personal loans of less than 5,000 baht
The government will submit a two-pronged debt relief plan to the Cabinet for approval on Wednesday (December 11).
The proposed measures aim to alleviate the financial burden on millions of individuals and small businesses struggling with debt.
Debt Relief Package 1: Interest waiver for struggling borrowers
The first package targets borrowers with non-performing loans (NPLs) of less than a year. Interest on SME, car, and home loans will be waived for borrowers who commit to a 12-month repayment plan. In return, borrowers must adhere to strict repayment terms. The government and commercial banks will cover a portion of the interest costs to facilitate this relief measure.
Debt Relief Package 2: Small debt forgiveness
The second package provides targeted relief for individuals with small outstanding debts. Borrowers with debt of less than 5,000 baht through credit cards or personal loans will have their debts forgiven. This measure is intended to help those who may have inadvertently fallen behind on their payments.
Addressing the NPL crisis
The government debt relief measures come as Thailand grapples with a surge in NPLs. As of October, the total value of NPLs reached 1.2 trillion baht, affecting nearly 9.6 million accounts. Another 2.1 million accounts are at risk of missing repayments.
Surapon Opassathien, president of the National Credit Information Company, expressed concern over the growing number of distressed borrowers. He noted that many borrowers are struggling to secure additional credit due to their existing debt burdens.
The government's debt relief initiatives aim to provide relief to struggling borrowers while stimulating spending, investment and employment. The Pheu Thai-led government will be watching the long-term economic impact of these measures carefully amid concern over possible fiscal imbalances.
