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Bank of Thailand Crafts Measures to Cut Household Debt

Money Currency Business Bank Finance Household Debt

The Bank of Thailand is crafting ways to reduce the country’s household debt burden, including borrowing from financial institutions and other loan sources not under central bank supervision.

BoT Assistant Gov. Thanyanit Niyomkarn said the bank initially 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 to reduce farmers’ debts, while implementing several debt relief and debt restructuring programs, to help retail and small and medium-sized enterprise 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 percent of gross domestic product.

Household debt was largely made up of commercial banks representing 43 percent of total debt, followed by specialized financial institutions at 29 percent, co-operatives at 15 percent and others at 13 percent.