Debt-aid applicants set to rise
The Bank of Thailand (BoT) expects the number of borrowers applying for debt-aid measures from financial institutions to rise in the third quarter, in line with higher infections and the impact of Covid-19.
In July, the number of such borrowers totalled 12.52 million accounts, of which 11.31 million are consumer loan accounts, 1.17 million small and medium-sized enterprise (SME) loan accounts, and 30,000 corporate loan accounts.
The total number significantly increased from 5 million accounts in June, said Suwannee Jatsadasak, the BoT's senior director for regulatory policy department 2.
Ms Suwannee added that borrowers participating in the debt-relief scheme accounted for outstanding loans of 3.28 billion baht in June, despite a decline at the beginning of the second quarter at 3.21 billion baht in May, 3.17 billion baht in April and 3.7 billion baht in March.
Meanwhile, the loan amount applying for debt-assistance measures peaked at 7.19 billion baht in July 2020.
"The number of borrowers applying for the debt-aid programme is expected to continue to increase in August and the higher number in the third quarter from the second mainly due to the greater impact of the pandemic," she said.
With this scenario, the central bank has still relaxed, adjusted and implemented additional debt aid measures to help outbreak-hit borrowers, particularly SMEs and individuals.
At the same time, the BoT has also relaxed and adjusted regulations on non-performing loan (NPL) classification and loan-loss reserve to allow financial institutions to help customers.
Given the central bank's debt relief measures and a relaxation of NPL classification, the commercial banking industry kept the overall NPL ratio steady at 3.09% in the second quarter compared with 3.10% in the previous quarter.
At the same time, the banking sector loans grew 3.7% in the second quarter this year from 3.8% in the first quarter.
In particular, SME loans showed a positive growth rate at 0.7% in the second quarter this year, the first time in five years, partly supported by the BoT's soft loan scheme.
Otherwise, SME loans are expected to contract consecutively from 2016, she said.