BANGKOK (Reuters) – Thailand’s cabinet on Tuesday approved support for non-bank debtors, a deputy finance minister said, as the government tries to tackle stubbornly high household debt that has been a drag on the economy.
The cabinet also approved soft loans worth 50 billion baht ($1.47 billion) for non-banks for three years to help debtors, Paopoom Rojanasakul said in a statement.
The support will include reducing instalment payments by 30% and a 10% reduction in interest rates for three years, he said.
The assistance will apply to debtors with car loans not exceeding 800,000 baht ($23,516), motorcycle loans of up to 50,000 baht and personal loans with a total credit limit of up to 200,000 baht, Paopoom said.
Borrowers with bad loans of up to 5,000 baht will be allowed to repay only 10% to settle the debt, he added.
The move follows earlier introduced support measures to tackle household debt, which was 16.34 trillion baht ($480 billion) at the end of September, or 89.0% of gross domestic product, among the highest ratios in Asia.
Of the debt amount, 65.4% was provided by banks and the rest by non-banks.
In December, Finance Minister Pichai Chunhavajira said Thailand’s household debt levels were too high and should come down to a ratio of 70% of GDP.
The high debt has restrained government efforts to boost Southeast Asia’s second-largest economy, which Bank of Thailand Governor Sethaput Suthiwartnarueput last month told Reuters could grow below 2.9% this year.
($1 = 34.02 baht)
(Reporting by Orathai Sriring and Kitiphong Thaichareon; Editing by John Mair, Martin Petty)
