Thailand launches new relief initiative to tackle household debts
The ‘You Fight, We Help’ project aims to help 1.9 million people deal with loans taken to buy a home, car or run a small business
The Finance Ministry is planning to launch an ambitious debt relief initiative titled “You Fight, We Help”, targeting retail debtors, homeowners, car owners and small businesses struggling with financial challenges.
The project received a green light from the Cabinet on Wednesday.
Finance Minister Pichai Chunhavajira explained the motivation behind the project, saying: “We recognise the importance of solving people's debt problems and believe this measure will help alleviate suffering and improve people’s well-being.”
The aim is to help some 1.9 million debtors who owe a combined debt of approximately 890 billion baht.
Shortly after the project got the Cabinet go-ahead, the ministry and the Bank of Thailand issued a joint statement outlining two key measures in the “You Fight, We Help” project.
The measures are:
1. Direct Payment, Reserve Assets
- Three-year interest payment moratorium
Debt reduction stages:
- First year: 50% principal reduction
- Second year: 70% principal reduction
- Third year: 90% principal reduction
Eligibility limits:
- Home loans: Up to 5 million baht
- Car loans: Up to 800,000 baht
- SME loans: Up to 5 million baht
2. Pay, Deal, Complete
- Targets small debts not exceeding 5,000 baht
- Allows debt restructuring and status change from “bad debt” to “debt closed”
Central bank governor Sethaput Suthiwartnarueput highlighted the two aspects of the initiative: Focusing on principal reduction and government and financial institutions collaborating to make contributions.
“The project’s name reflects our intentions: ‘You Fight’ represents debtors ready to solve debt problems, while ‘We Help’ represents government and financial institutions prepared to support them,” he noted.
Payong Sriwanich, president of the Thai Bankers Association, said: “We are ready to support the government’s project and expect to assist approximately 1.5 million accounts representing over 44 billion baht in debt.”
Giorgio Gamba, president of the Association of International Banks, affirmed: “We are committed to fully solving the country’s household debt problem and are willing to cooperate in implementing the project."
Withai Rattanakorn from Government Savings Bank, meanwhile, explained that government financial agencies are prepared to support the initiative, with discussions ongoing about additional assistance for non-bank debtor groups.
The programme will be funded through a combination of sources, including a 50% reduction in contributions from the Financial Institutions Development Fund, government loans and soft loans from the Government Savings Bank.
The government has also stressed that achieving sustainable debt resolution requires not only financial support but also the development of skills to boost income for debtors.
This integrated approach to addressing Thailand’s household debt challenge was developed jointly by the Finance Ministry, the Bank of Thailand, the National Economic and Social Development Board, the Thai Bankers Association, the International Banking Association and state financial institutions.
Debtors have until February 28, 2025, to apply for assistance via the Bank of Thailand website https://www.bot.or.th/khunsoo.
