Govt to tackle THB1.31 trillion NPLs of households, SMEs
Interest payments for those NPLs that qualify for the campaign will be suspended for 3 years, Finance Ministry announces
The government is planning to solve the debt problems of the public and small and medium enterprises (SMEs) by suspending interest payments for 3 years on accounts that became non-performing loans (NPLs) less than a year prior to October 2024.
The campaign will help debtors in 2.3 million accounts pay off their debts worth 1.31 trillion baht, Paopoom Rojanasakul, deputy finance minister said on Wednesday.
Apart from falling into the NPL category for less than a year, the eligible candidates’ total debt must be less than 3 million baht for housing loans and SME loans, and less than 800,000 baht per vehicle for auto loans, he added.
Paopoom said that the ministry has set the cut-off date for NPLs for October 31, 2024, to prevent newer accounts deliberately defaulting on payments to join the campaign.
The Finance Ministry estimates that the campaign will benefit 460,000 accounts of housing loans worth 483 billion baht, 1.4 million accounts of auto loans worth 375 billion baht, and 430,000 accounts of SME loans worth 454 billion baht.
Registration is required to join the campaign, said Paopoom, adding that the details will be announced by the Bank of Thailand’s Financial Institutions Policy Committee (FIPC) at a later date.
Paopoom explained that the campaign will not be financed from the government budget, but will use the money available from allowing Thai banks to pay a reduced annual contribution to the Financial Institutions Development Fund (FIDF), from the current 0.46% to 0.23% of deposits.
Financial institutes will also contribute part of the funding for the campaign. The FIPC will announce the details of this later, he said.
Regarding concerns that reducing contributions to the FIDF could slow down the repayment of debts that institutes owe to the fund, Paopoom stated that the government has considered this issue carefully and concluded that addressing public debt problems should be a priority, and that the reduced contribution to the FIDF is still at a manageable level.
