Thailand govt cuts informal debts by 670 million baht in two months

The Government of Thailand has slashed the nation’s informal debts by 670 million baht (US$18.69 million) in a span of two months, successfully resolving 102,000 out of the 140,000 reported cases. This significant reduction is part of an initiative to alleviate the household debt burden.

Prime Minister Srettha Thavisin, who also holds the position of Finance Minister, attributed this progress to the concerted efforts of several agencies. These include the interior, finance, justice, education, and agriculture and cooperatives ministries, and various government-associated financial institutions.

The government, since the start of the initiative on November 28 of the previous year, received over 140,000 pleas for assistance. Of these, 102,000 have been successfully addressed, thereby decreasing the total debt under the government’s purview by 670 million baht.

The initiative had around 9.8 billion baht (US$273 million) in debt under its management as of December 1. The 61 year old Thai prime minister committed to settling this debt before the termination of his prime ministerial tenure.

PM Srettha, in a press conference held yesterday, February 12, revealed that the Interior Ministry had taken up the responsibility of indexing off-system debts. This action was aimed at facilitating negotiations with informal lenders.

The Royal Thai Police (RTP) has been tasked with levying criminal charges against creditors who employ illicit practices to enforce repayments.

In addition, the government will implement other initiatives to address the nation’s escalating household debt. These include the establishment of debt-solving markets, set to be organised in every province four times a month.

Government-owned banks will provide low-interest loans to debtors who have successfully brokered deals with their creditors. Additionally, local authorities will introduce courses to enhance people’s professional skills, enabling them to earn additional income.

According to the Bangkok-born prime minister, citizens grappling with debt-related issues can seek assistance at their local district office or by contacting the Ministry of Interior’s Damrongdhama Centre via the 1567 hotline, available 24 hours a day.

In related news, the Bank of Thailand’s new lending regulation, banning charges for debt prepayment and restructuring, aimed to control household debt.