The state-owned Government Savings Bank (GSB) plans to launch a low-rate unsecured loan scheme for low-income earners and the elderly in December to comply with the government's ambition to help these groups.
The loan scheme aims to assist those on the bottom rung of the economic ladder and the elderly, said Chatchai Payuhanaveechai, GSB chief executive and president.
Those earning less than 100,000 baht a year are the target group, but people earning over that level are also eligible to apply if they want to borrow for career development, he said without revealing the loan's interest rate.
GSB is set to offer more lenient requirements for the low-cost loan than the bank's People Bank scheme, he said, and will further relax requirements if the Finance Ministry allows it to become part of the Public Service Account (PSA). The bank might not require borrowers to have a minimum salary or debt-to-income ratio, said Mr Chatchai.
Specialised financial institutions, which fund projects under the PSA, are not permitted to apply for the Bank of Thailand's non-performing loan's classification.
The People Bank is a loan scheme to comply with the past government's policy that sought to enable hawkers, stall owners and small retailers to access cheaper loans rather than resorting to underground lending.
The bank typically charges an interest rate of 1% per month and cuts the rate to 0.5-0.75% for borrowers with good payment records.
It has loans outstanding of 69.6 billion baht with 1.07 million current borrowing accounts.
Since the loan scheme was implemented 15 years ago, the People Bank has extended 301 billion baht in total to 4.9 million accounts.
Mr Chatchai said the low-cost loan scheme for the elderly and low-income earners is to comply with policies implemented by Deputy Prime Minister Somkid Jatusripitak and Finance Minister Apisak Tantivorawong.
The loan amount is not a matter for the GSB as the bank has ample liquidity for such a scheme, he said.
Somchai Sujjapongse, permanent secretary for finance, recently said the Fiscal Policy Office is studying the second phase of the government's assistance scheme and it will report the result to the Finance Ministry on Nov 20.
The package is expected to be finalised by December.
The Finance Ministry's plan calls for the GSB and the Bank for Agriculture and Agricultural Cooperatives to be channels in implementing the second phase of the government's welfare scheme.