New measures to support small debtors amid rising bad debt

In response, the government is proposing a comprehensive solution, which includes a three-year interest exemption and an extension of the principal repayment period for affected borrowers.

During a recent briefing, Pichai outlined the government's strategy aimed at restructuring the debts of retail debtors. The initiative intends to achieve two key objectives: enabling borrowers to repay existing debts and facilitating their access to additional loans. 

He specified that the programme would target debtors who have recently begun to face difficulties, particularly those whose payments have been overdue for more than 30 days but less than 90 days. Some consideration may also be given to those who have been in arrears for up to a year, as they are still perceived as potentially salvageable.

The proposed guidelines stipulate that participants in the project will not be required to pay interest for three years. The government aims to collaborate with the banking sector to cover the interest costs that will not be collected during this period. Consequently, borrowers will only pay back the principal, which will be reduced to half of the previous amount, with an extended repayment schedule.

Pichai noted that these debtors remain classified as non-performing clients and that banks will assess each situation individually to determine eligibility. Preliminary discussions with commercial banks have reportedly yielded a general agreement on the proposed guidelines, paving the way for further dialogue to arrive at effective solutions.

Furthermore, discussions are set to take place with the Bank of Thailand (BOT) to consider relaxing the loan-to-value (LTV) ratio, allowing more individuals to access housing loans.