Debt suspension for Village Fund members is scheduled to go before the cabinet for consideration on Monday.
The weekly meeting skips to Monday instead of Tuesday, as Prime Minister Prayut Chan-o-cha leaves for Germany on Monday.
A source from Government House who requested anonymity said the National Village and Urban Community Fund Office would propose a debt suspension plan for three years to help alleviate the debt burden of its members.
The source said many Village Fund members cannot service their debts, with many relying on loan sharks to repay the money owed, making their debt worse.
There are 79,595 Village Funds covering 13 million members in 77 provinces. Just 2,560 Village Funds are labelled as financially strong and capable of being upgraded to a community financial institution.
The office reported that the Village Funds' revolving funds totalled 300 billion baht in 2017.
The Village Fund scheme was introduced 16 years ago with the aim of serving as a microcredit lender to people in rural areas, inspired by Grameen Bank in Bangladesh.
The funds use a self-governing concept in which members must ensure that borrowers pay their debts to sustain money put into the funds.
To ease the financial burden of Village Fund members, the office teamed with the Bank for Agriculture and Agricultural Cooperatives in the middle of this year to extend 1 billion baht in loans with a minimum lending rate to members to repay the loan sharks.
The scheme allows the members to borrow 50,000 baht each.
In fiscal 2017, the government allocated 35 billion baht to the Village Funds, or 200,000 baht for each village.
The state budget was raised to 55 billion baht in fiscal 2018, or 300,000 baht for each village.
Apart from the aid measures for Village Fund members, Deputy Prime Minister Somkid Jatusripitak said the government is about to introduce two or three financial aid programmes for other groups of people, such as salaried employees who want to run their own business and taxi drivers who want to have their own cars, as well as enact year-end shopping tax breaks.