The loan target provided for agricultural purposes has been downgraded by almost half because of the Covid-19 crisis, says the Bank for Agriculture and Agricultural Cooperatives (BAAC).
The bank previously projected a full-year loan target of 600 billion baht, but has cut it back to 370 billion because of the pandemic and debt moratorium programme, said BAAC president Apirom Sukprasert.
For the first four months of fiscal 2020, the BAAC disbursed loans worth 170 billion baht. The BAAC's fiscal year starts on April 1 and ends on March 31.
For the debt moratorium programme, almost 100% of BAAC borrowers, some 3.28 million, have entered the scheme, with a combined debt worth 920 billion baht. It is due to expire in early 2022.
Some 260,000 small and medium-sized enterprises involved with farming have entered the debt moratorium programme, with a debt value totalling 81 billion baht. The debt moratorium was scheduled to lapse in September, but the Bank of Thailand extended the scheme to December.
BAAC has talked with borrowers about their financial health. In cases of deteriorating financial health, borrowers will undergo a debt restructuring scheme to prevent a rise in non-performing loans (NPLs), said Mr Apirom.
There are around 100,000 cases where BAAC borrowers underwent debt restructuring.
The BAAC's existing NPL ratio stands at 4.03% of total outstanding loans worth 1.5 trillion baht, down from 4.3% at the end of fiscal 2020, attributed to the debt moratorium.
Although the majority of borrowers have entered the debt moratorium, there are still borrowers who service their debts normally, with total principal repayment at 40 billion baht since the start of fiscal 2021, he said, a 30% year-on-year decline.
As Thailand is a global food production base, the farming sector should have a positive outlook, said Mr Apirom.