About 3,400 small and medium companies with about two billion baht of debt in total have entered a loan compromise process to avoid being bankrupted.
The Legal Execution Department has helped to with negotiations between the state-owned Small and Medium Enterprise Development Bank of Thailand (SME Bank) and bad debtors the court has ruled must repay the loans they received from the bank.
The outcome is that debtors will have another opportunity to negotiate with the bank to reduce the size of their debt and restart the payment process.
SME Bank chair Salinee Wangtal said the bank has for the first time offered some flexibility for customers owing less than 20 million baht each to renegotiate the payment terms.
The pilot project will cover 3,400 debtors in Bangkok and nearby provinces by Saturday. Then it will be expanded to enable restructuring of debts for customers in the provinces who have a total of around three billion baht in combined debt.
Ruenvadee Suwanmongkol, director-general of the Legal Execution Department, said the department will work with other financial institutions to negotiate with their debtors for loan compromises. This was considered a better way to solve the problem, as creditors would at least get some of the money owing them.