
A large number of borrowers have registered for the "You Fight, We Help" debt relief scheme one month after its implementation, but many do not qualify to participate in the programme, according to bankers.
Kris Chantanotoke, chief executive of Siam Commercial Bank (SCB), said a portion of the registrants for the scheme do not meet the qualifications. As a result, the bank improved its communication strategies to better reach the target audience.
"The bank adjusted its operations to address issues that have arisen during the first month of the debt relief programme's implementation. However, more time is needed to fully evaluate the programme's effectiveness. The bank remains committed to assisting vulnerable clients in resolving their debts under the scheme," said Mr Kris.
SCB is the country's fourth-largest lender by total assets and a leader in the mortgage sector.
According to the Bank of Thailand, 461,029 individuals registered for the debt relief scheme, with a total of 220,296 loan accounts approved.
The programme allows qualified borrowers to suspend interest payments for a period of three years and reduce monthly debt instalments via a step-up repayment plan.
Under these measures, regulatory agencies and financial institutions aim to address Thailand's household debt crisis. In the third quarter of last year, the country's household debt-to-GDP ratio was roughly 90%.
The "You Fight, We Help" scheme was approved by the cabinet on Dec 12, 2024. The programme is open to borrowers with debts overdue for a period of up to one year. The programme covers mortgages of up to 5 million baht, car loans of up to 800,000 baht, and small business loans of up to 5 million baht.
Eligible borrowers must have been in debt before Jan 1, 2024, with repayment defaults ranging from 30 to 356 days. Borrowers who participated in previous debt restructuring programmes from Jan 1, 2023 and defaulted on repayments for no more than 30 days are also eligible.
Sakchai Peechapat, chief executive of Tisco Financial Group, said 7,000-8,000 customers applied for the programme. However, only 30% met the qualifications. The bank approved some of these registrants for the scheme.
Aphinant Klewpatinond, chief executive of Kiatnakin Phatra Financial Group (KKP), said around 50% of registrants for the programme did not qualify.
Many misunderstood scheme conditions, particularly those related to the debt default period, he said.
"The bank needs to clarify the conditions and proceed with normal debt collection processes," said Mr Aphinant.
Auto hire-purchase loans are a core business for both Tisco and KKP, accounting for 43% and 45% of their portfolios, respectively.