Sunday, September 19, 2021

Bank of Thailand Seeks Ways to Reduce Household Debt

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BANGKOK (NNT) – The Bank of Thailand (BoT) has discussed, with relevant authorities, ways to lower the country’s household debt, which includes borrowing from financial institutions and other loan sources, including those that are not under the BoT’s supervision.

BoT assistant governor Thanyanit Niyomkarn said, in the initial stage, the BoT intends to focus on government agency-related household debt, starting with co-operatives and student loans, with the aim of expanding to cover farmers’ loans next year.

She said the central bank plans to hold discussions with the teacher co-operatives, police co-operatives and the Student Loan Fund to identify debt solutions for borrowers. Moreover, the bank will help design the debt repayment structures of these organizations, in line with income, debt burden and other related factors of each borrower group.

Thanyanit said the BoT also aims to expand its cooperation with the Bank for Agriculture and Agricultural Cooperatives (BAAC) to reduce farmers’ debts, while implementing several debt relief and debt restructuring programs, to help retail and small and medium-sized enterprise (SME) borrowers who are suffering from the COVID-19 outbreak.

According to the BoT, Thailand’s household debt in the first quarter of this year increased to 14.1 trillion baht, or 90.5% of gross domestic product (GDP). Household debt was largely made up of commercial banks representing 43% of total debt, followed by specialized financial institutions at 29%, co-operatives at 15% and others at 13%.

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