Thailand's Finance Ministry Proposes Measures to Alleviate Household Debt and Boost Automobile Industry
New initiatives target small personal loans and support for the pickup truck market amidst economic challenges.
The Ministry of Finance in Thailand is developing measures to address household debt, particularly focusing on loans amounting to less than 100,000 baht, which currently represent 35% of total household debt.
Finance Minister Pichai Chunhavajira announced this during the House and Condo Expo, revealing that the nation's total household debt stands at 13 trillion baht, excluding savings cooperatives, affecting over 5 million individuals across 9 million accounts.
Non-performing loans (NPLs) related to household debt currently total 1.22 trillion baht, with approximately 427 billion baht comprised of amounts less than 100,000 baht.
Minister Pichai indicated that resolving these smaller debts could lead to a substantial decrease in household debt burden.
Many of these debts are unsecured, with financial institutions having already set aside provisions for potential defaults.
Data from the National Economic and Social Development Council highlights that household debt accounted for 89% of GDP in the third quarter of 2024, reaching 16.3 trillion baht.
A significant portion of this debt is tied to consumption and credit cards, prompting the Finance Ministry to explore flexible restructuring options to aid those unable to meet their repayment obligations.
To facilitate this, the government plans to completely remove qualifying individuals from the National Credit Bureau's blacklist following debt resolution.
Conditions for participation in the proposed restructuring scheme will include demonstrating limited repayment capability and potentially incurring minimal costs for the financial institutions involved.
In addition to addressing household debt, the Finance Ministry has also announced an initiative designed to stimulate the struggling automobile sector, particularly focusing on pickup trucks.
Deputy Finance Minister Paopoom Rojanasakul introduced the 'Finance Ministry will guarantee your truck' program, which is implemented through the Thai Credit Guarantee Corporation (TCG).
This new initiative will provide loan guarantees for truck purchases, addressing challenges stemming from strict lending policies by financial institutions and a downturn in sales.
The program is set to run from April 1 to December 30, coinciding with the Bangkok International Motor Show, featuring an initial credit allocation of 5 billion baht and individual guarantees up to 1.5 million baht.
The government plans to fully subsidize the guarantee fee for the first three years, subsequently reducing it to 1.5% for the fourth through seventh years.
This initiative aims to promote new loans, boosting the automobile market and related job sectors in Thailand, which remains a vital regional production hub for vehicles.
The anticipated economic impact of these new loans is estimated to reach at least 21 billion baht, underlining the sector's essential role in professions such as agriculture, construction, freight, and trade.
Finance Minister Pichai Chunhavajira announced this during the House and Condo Expo, revealing that the nation's total household debt stands at 13 trillion baht, excluding savings cooperatives, affecting over 5 million individuals across 9 million accounts.
Non-performing loans (NPLs) related to household debt currently total 1.22 trillion baht, with approximately 427 billion baht comprised of amounts less than 100,000 baht.
Minister Pichai indicated that resolving these smaller debts could lead to a substantial decrease in household debt burden.
Many of these debts are unsecured, with financial institutions having already set aside provisions for potential defaults.
Data from the National Economic and Social Development Council highlights that household debt accounted for 89% of GDP in the third quarter of 2024, reaching 16.3 trillion baht.
A significant portion of this debt is tied to consumption and credit cards, prompting the Finance Ministry to explore flexible restructuring options to aid those unable to meet their repayment obligations.
To facilitate this, the government plans to completely remove qualifying individuals from the National Credit Bureau's blacklist following debt resolution.
Conditions for participation in the proposed restructuring scheme will include demonstrating limited repayment capability and potentially incurring minimal costs for the financial institutions involved.
In addition to addressing household debt, the Finance Ministry has also announced an initiative designed to stimulate the struggling automobile sector, particularly focusing on pickup trucks.
Deputy Finance Minister Paopoom Rojanasakul introduced the 'Finance Ministry will guarantee your truck' program, which is implemented through the Thai Credit Guarantee Corporation (TCG).
This new initiative will provide loan guarantees for truck purchases, addressing challenges stemming from strict lending policies by financial institutions and a downturn in sales.
The program is set to run from April 1 to December 30, coinciding with the Bangkok International Motor Show, featuring an initial credit allocation of 5 billion baht and individual guarantees up to 1.5 million baht.
The government plans to fully subsidize the guarantee fee for the first three years, subsequently reducing it to 1.5% for the fourth through seventh years.
This initiative aims to promote new loans, boosting the automobile market and related job sectors in Thailand, which remains a vital regional production hub for vehicles.
The anticipated economic impact of these new loans is estimated to reach at least 21 billion baht, underlining the sector's essential role in professions such as agriculture, construction, freight, and trade.
