The government expects its "You Fight, We Help" debt relief programme will attract participation from debtors owing up to 300 billion baht, representing around 70% of those eligible to participate.
According to Sasikarn Watthanachan, deputy spokeswoman for the Prime Minister's Office, the Government Housing (GH) Bank, the Finance Ministry and the Bank of Thailand have joined forces with this initiative to alleviate the debt burden of individuals and businesses affected by the sluggish economy, supporting them in regaining stability and resilience over the long term.
The debt relief measure targets bank clients with loan amounts of up to 5 million baht who signed contracts before Jan 1, 2024. Eligible participants include those with overdue payments from 31 days to 365 days, those with overdue payments of no more than 30 days who had previously undergone debt restructuring, and those who experienced arrears exceeding 30 days between 2022 and 2024, as of Oct 31, 2024.
Interested individuals can register via the GHB ALL GEN or GHB ALL BFRIEND apps from Jan 6 to Feb 28, 2025.
To facilitate clients retaining their homes, GH Bank implemented two measures: "Direct Payment Retains Assets" and "Pay, Close, and Conclude".
Ms Sasikarn said the government is ready to implement policies to ease the financial burden of individuals facing debt repayment difficulties, helping them maintain liquidity and retain essential assets.
Debtors participating in the programme are expected to account for around 300 billion baht of the 450-billion total allocated by specialised financial institutions (SFIs) involved in the initiative.
The funds used for the initiative are partially derived by halving the contributions of financial institutions from 0.46% to 0.23% of their deposit base. This adjustment should generate 39 billion baht in funds.
Combined with an additional 39 billion baht contributed by financial institutions, the programme is anticipated to have 78 billion baht annually to address debt issues.
Over the three years of the programme, total funding should exceed 200 billion baht, although the final amount will depend on the number of participants.
For state financial institutions, the Finance Ministry will request funding from SFIs under Section 28 of the State Financial and Fiscal Discipline Act to assist debtors participating in the programme.
In addition, funds are expected from contributions to the SFI support programme, with the Finance Ministry approving a reduction in the contribution rate from 0.25% to 0.125%.
This adjustment should provide an additional 7-8 billion baht annually to assist debtors.
Finance Minister Pichai Chunhavajira said earlier the cooperation of financial institutions in helping to address household debt would ensure the survival of debtors, which in turn ensures the survival of financial institutions, as 90% of their debtors are domestic customers. Mr Pichai said resolving household debt would increase confidence in the Thai economy and contribute to economic growth in 2025, with an anticipated expansion of 3-3.5%.