Govt plans asset management firm to tackle soaring household debt

Govt plans asset management firm to tackle soaring household debt

People seek consultation on how to settle their debts at an event jointly organised by the Justice Ministry and 23 financial institutes at Suan Dusit University on Jan 27. (Photo: Apichart Jinakul)
People seek consultation on how to settle their debts at an event jointly organised by the Justice Ministry and 23 financial institutes at Suan Dusit University on Jan 27. (Photo: Apichart Jinakul)

The government will set up an asset management firm in the first quarter of this year to help resolve the stubborn problem of high household debt, Prime Minister Srettha Thavisin said on Monday.

Household debt management had many challenges, with some creditors refusing to enter the process, he told a press briefing on debt.

Thailand has one of the region's highest ratios of household debt, at 90.9% of gross domestic product as of the end of the 2023 fiscal year on Sept 30. Use of illegal loan sharks is rife among lower-income families unable to get bank loans, with many people trapped by debt with high interest rates.

The asset management firm would be set up by the Government Savings Bank and would mainly tackle persistent debts, Srettha said. He gave no other details.

The new company would offer more relaxed rules in managing debt, according to another official.

The government has previously announced debt measures including lowering interest rates and debt suspensions to manage the country's 16 trillion baht (US$446 billion) worth of household debt.

Mr Srettha has cited the debt problem as a major impediment to strengthening Southeast Asia's second-biggest economy, which his government is seeking to revive with big stimulus and programmes to boost its important tourism sector. 

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