The Bank of Thailand has urged banks to proactively contact all eligible borrowers under the government's "You Fight, We Help" debt relief scheme and to enhance communication efforts after a lower-than-expected number of debtors registered for the programme.
From Dec 12, 2024, to Jan 15, 2025, a total of 402,656 borrowers registered for the scheme, covering 454,232 loan accounts. However, the central bank estimates that about 1.9 million borrowers, with 2.1 million loan accounts, are eligible to join the programme, according to Suwannee Jatsadasak, assistant governor of the central bank's supervision group.
The majority of applicants are mortgage loan borrowers. A significant number of registrants have chosen the step-up debt instalment measure, which reduces monthly payments to help borrowers retain ownership of their homes and vehicles, according to central bank data.
The programme allows qualified borrowers to suspend interest payments for up to three years and reduce monthly debt instalments through a step-up repayment plan.
The "You Fight, We Help" scheme, approved by the cabinet on Dec 12, 2024, is available to borrowers with debts overdue for up to one year. It covers housing loans of up to 5 million baht, car loans of up to 800,000 baht, and small business loans of up to 5 million baht.
To qualify, borrowers must have incurred the debt prior to Jan 1, 2024, with repayment defaults ranging from 30 to 356 days. Borrowers who participated in previous debt restructuring programmes between Jan 1, 2023, and Dec 31, 2023, and who subsequently defaulted on repayments for no more than 30 days, are also eligible.
"The current number of registrants is lower than the estimated 1.9 million eligible borrowers. This shortfall is partly due to inadequate communication with the targeted segments," said Ms Suwannee.
In response, the central bank has enhanced its outreach efforts through nationwide networks, social media platforms and influencers. The central bank has also urged financial institutions to improve their communication strategies, particularly with their eligible clients.
"We have asked financial institutions to directly contact all eligible borrowers and facilitate their registration through the creditors' systems, in addition to the central bank's system," Ms Suwannee added.
However, some eligible borrowers have been uncontactable. Additionally, a portion of registrants failed to meet the programme's criteria, such as borrowers with a good repayment record and no defaults.
Borrowers with good repayment records who wish to restructure their debt to ease their financial burden can explore other restructuring options offered by financial institutions under the central bank's responsible lending practices, Ms Suwannee noted.
Furthermore, some registrants mistakenly applied through banks that are not their creditors. For instance, a borrower indebted to Bank A may have attempted to register with Bank B, she said.
Nevertheless, despite these challenges, Ms Suwannee expressed optimism, noting that more borrowers are expected to register for the programme ahead of the application deadline on Feb 28, 2025.