Farmers who have non-performing loans (NPLs) at the Bank for Agriculture and Agricultural Cooperatives (BAAC) can enter the debt suspension programme without going through debt restructuring to return to good debtor status, says secretary to the finance minister Paopoom Rojanasakul.
He said all farmers who are BAAC debtors with total debt in all accounts not exceeding 300,000 baht, including NPL debtors, can enter the debt suspension scheme.
Mr Paopoom said there was previously a misunderstanding that people with NPLs must first go through debt restructuring to be eligible for the programme.
The government will help with interest payments for this group of debtors for three months as an incentive for them to return to regular debtor status, which should help reduce NPLs for the BAAC, he said.
Monthly instalments for this group of debtors will be used solely to reduce the debt principal, expediting the reduction of the debt burden, said Mr Paopoom.
As for small and medium-sized enterprises (SMEs), the Finance Ministry plans to suspend debt payments for one year for those categorised as Bank of Thailand account status code 21, meaning they were affected by the Covid pandemic.
This group numbers 3 million, with a total of roughly 300 billion baht in debt as of the second quarter this year.
However, the ministry is still considering whether debt suspension will be applicable to only the principal or to both the principal and interest.
The debt moratorium for SMEs will mainly focus on those who borrow from state-owned financial institutions.
For SME borrowers from commercial banks, the ministry and the Bank of Thailand plan to seek further cooperation from commercial banks.
On Sept 26, the cabinet approved a three-year debt moratorium for farmers, which is expected to cost the government roughly 30 billion baht.
The first phase of the programme begins on Oct 1, running until Sept 30 next year.
Farmers eligible for the moratorium must not have total debt from BAAC accounts exceeding 300,000 baht as of Sept 30 this year.
Some 2.69 million farmers with a combined debt of about 300 billion baht are eligible to join the scheme, Mr Paopoom said, accounting for 64% of the BAAC's debtors.