PM pushes for urgent soft loans, income tax cuts for flood victims

Prime Minister Paetongtarn Shinawatra has instructed the Finance Ministry to grant soft loans and reduce income tax to help flood victims get back on their feet again.

Government spokesman Jirayu Huangsap said the Cabinet reviewed packages to help flood victims in over 50 provinces during its weekly meeting on Tuesday. At the meeting, the PM called on the Finance Ministry to swiftly come up with a soft loan programme and consider reducing income tax for people hit by floods.

This package follows the Cabinet’s earlier decision to grant 9,000 baht in cash to each flood-hit family. The Cabinet may also next week consider the option of granting an additional 10,000 baht to each flood-affected household as well as consider waiving water and electricity bills for a while, the spokesman added.

Jirayu said the Cabinet had earlier allocated 50 billion baht to provide soft loans to flood victims and small businesses in flood-hit provinces.

During the Tuesday meeting, the Cabinet was also informed of several financial measures to help SMEs and people affected by floods, Jirayu said.

He claimed one of the schemes grants loans to SMEs of no more than 40 million baht at an annual rate of 3.5% for the first two years. This scheme is being offered by state banks as well as 16 commercial banks.

The Thai Credit Guarantee Corporation (TCG) has also been granted a budget of 1 billion baht to guarantee loans for SMEs, Jirayu said. Each SME can seek a 10-year credit guarantee for loans between 10,000 and 2 million baht at the rate of 1.25%.

He said the Government Savings Bank is also allowed to approve a six-month debt moratorium for borrowers affected by floods. Only those who owe less than 10 million baht will be eligible for this moratorium, the spokesman added.

As for flood victims who have outstanding credit card payments, their minimum payment will be reduced to 3% of the outstanding amount for three rounds of payment, the spokesman added.

Meanwhile, the Bank for Agriculture and Agricultural Cooperatives has been told to extend the repayment period for flood-affected borrowers to 20 years, and they will be exempted from repaying the principal amount in the first three years. Only borrowers who have not defaulted on payments for three years will be eligible for this debt rollover, Jirayu added.

He said state banks will also provide loans of up to 50,000 baht each for emergencies, and the borrowers will be allowed to repay this amount in three years at a low MRR (minimum retail rate) for the first six months.

State banks will also consider approving loans of up to 500,000 baht for flood victims to repair their homes and farming equipment with repayment over 15 years at the MRR rate plus 2%, he added.

Jirayu went on to say that the Finance Ministry needs to first finalise income tax reduction measures before they are sent to the Cabinet for approval.