State assists GSB with bad debt

State assists GSB with bad debt

The government plans to subsidise 40% of the bad debt the Government Savings Bank (GSB) has incurred from loans it granted to individual borrowers to help ease their hardship during the pandemic.

GSB president Vitai Ratakorn said the bank's Covid-19 loan programme has granted loans to 650,000 borrowers over the past month, worth a total value of 6.5 billion baht.

The loans are limited to 10,000 baht per person and carry a monthly interest rate of 0.35%.

People can apply for the loan on the bank's MyMo mobile application. The scheme, which expires at the end of this month, is expected to meet its target of extending 10 billion baht in loans.

The scheme targets those with a monthly salary not exceeding 30,000 baht. The loan does not require collateral placement and has a grace period for principal and interest payments during the first six months.

The government assigned the state-run GSB and Bank for Agriculture and Agricultural Cooperatives (BAAC) to extend low-interest loans to low-income earners since last year following the outbreak of Covid-19.

The government set a target for each bank to lend to 1 million people this year. The BAAC begins its lending scheme next month.

Last year, GSB and BAAC granted loans under a similar scheme to 1.95 million and 890,000 borrowers, respectively.

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