The Finance Ministry plans to launch the second phase of a three-year debt suspension scheme for farmers in April, says Deputy Finance Minister Julapun Amornvivat.
He said the ministry is drafting a proposal for the suspension scheme to submit to the Bank for Agriculture and Agricultural Cooperatives (BAAC) board.
Details such as the debt threshold were not divulged, as further cabinet approval is required.
Those with debts exceeding 300,000 baht across all their loan contracts with the BAAC account for 30% of the bank's total loan portfolio.
However, the second phase of the scheme will begin following the completion of the first phase, tentatively on Oct 1, 2024.
To date, BAAC debtors participating in the first phase account for about 80% of the total number of the bank's eligible debtors.
On Sept 26, 2023, the cabinet approved a three-year debt suspension scheme with the first phase running from Oct 1, 2023 until Sept 30, 2024.
Those eligible for the debt repayment suspension are farmers who borrow from the BAAC with outstanding principal loans of no more than 300,000 baht each in all accounts as of Sept 30, 2023, with their loan status classified as normal loan, special mention (SM) loan or loan overdue by no more than three months, and non-performing loan (NPL).
About 2.7 million farmers with combined debts of about 300 billion baht are eligible to join the scheme.
They can apply to join the programme until Jan 31.
He added that those with NPLs can enter the debt-suspension programme only after undergoing debt restructuring in line with the BAAC's criteria.
Apart from the debt suspension programme, the government has also pushed ahead with a raft of options to deal with both formal and informal debt. Regarding formal debt, the government has classified debtors into four groups.
The first group are categorised as Bank of Thailand account status code 21, meaning they were affected by the Covid pandemic.
This group numbers 1.1 million, with the majority of debtors from the Government Savings Bank and BAAC.
It was established to distinguish NPLs during unusual circumstances, namely the pandemic, from normal NPLs. This group must have no history of default and regularly make payments, but are delinquent as a consequence of the pandemic.
The second group are those who earn regular income such as civil servants, teachers, police and military officers. Debts are consolidated under one financial institution with a cheaper interest rate.
The third group are those with irregular income such as farmers and hire purchase debtors. Assistance for this group include debt suspension, interest rate reduction and reduced instalment payments.
The last group are those with bad debt with specialised financial institutions (SFIs) for a long period.
SFIs can transfer some of their debt (not exceeding 20 million baht) to the asset management company to be established by the Finance Ministry.
Debtors, tallying 3 million accounts with a total value of 230 billion baht, can then restructure or write off some of the debt.
The ministry expects the measures to help SFIs with debt restructuring, allowing more flexibility, in line with the government's policy of resolving debt in an integrated manner.