Srettha pledges to address Thai civil servant debt issue

Addressing the debt crisis affecting nearly three million Thai civil servants, Prime Minister Srettha Thavisin pledged to address the issue accordingly.

The government’s focus is on reducing interest rates to alleviate the financial burden. PM Srettha spoke of the positive progress made in the last two months following a meeting with 11 state agency chiefs who are working towards solving civil servant debt issues.

The 62 year old PM warned that the current debt situation could potentially evolve into a national crisis if left unattended. PM Srettha revealed that state agency heads had made requests to financial institutions to lower interest rates, thereby easing the debt load and making repayment more feasible for borrowers. However, he noted that the Bank of Thailand had maintained its position.

Additionally, the Bangkok-born prime minister urged the Cooperative Promotion Department (CPD) to participate in the government’s debt relief programme promptly. A significant number of civil servants and state employees have accrued substantial debts to their organisations’ cooperatives.

Moreover, PM Srettha is set to engage in discussions with the Student Loan Fund (SLF) management about the potential reduction of interest rates for defaulting borrowers who currently face an annual interest rate of 18%.

Kittirat Phanphet, Deputy Police Chief and Deputy Chair of the Government Committee on People’s Debts, revealed startling figures at the meeting. Of 3.1 million civil servants, approximately 2.8 million have a combined debt exceeding 3 trillion baht to their organisations’ cooperatives.

While these debtors continue to make repayments, most struggle to cover their living expenses after settling their debts. The need for immediate assistance is imperative, Kittirat emphasised.

The deputy chair noted an alarming increase in non-performing debts across all loan types. To effectively resolve the issue, he suggested that relevant laws may need amendments to facilitate proper debt negotiation and settlement.

Defence Permanent Secretary Sanitchanok Sangkhachan shared with the meeting that the ministry has implemented various measures to aid personnel facing financial hardships, reported Bangkok Post.

This debt crisis impacting civil servants has become a national concern, demanding immediate and effective solutions.