The Bank of Thailand's Debt Clinic scheme, which pools unsecured bad loans to turn them into performing loans, is offering a grace period on principal and interest and a two-percentage-point rate cut for six months to ease debtor burden amid the Covid-19 crisis.
The six-month period runs from April to September, said assistant governor Thanyanit Niyomkarn.
Because the outbreak situation over the next six months is unclear, the payment history of Debt Clinic participants who fail to make the full instalment amount during the period will remain good, she said.
The coronavirus pandemic has dealt a blow to individuals, businesses and the economy. The Debt Clinic has seen signs of longer overdue payments and deteriorating payment ability as social distancing protocols curb normal activity, Mrs Thanyanit said.
"The committee overseeing the Debt Clinic scheme has agreed that assistance measures for participants are urgently needed to tackle the Covid-19 impact, which could escalate and broaden in the period ahead," she said.
For the two-point rate cut for six months, interest will be reduced to 2-3% from 4-5% at present.
The rate cut will alleviate interest burden and also motivate participants to maintain their instalment repayment amount, as their principal will rise when the rate is lowered, Mrs Thanyanit said.
The aid measures will automatically apply to all participants. Scheme applicants who are approved from April to September will also be entitled to the assistance.
"We believe the measures or medicine that we have given will work to some extent," she said.