The Finance Ministry, the Bank of Thailand and state-owned banks will hold a meeting soon to find ways to help ease the hardship caused by the pandemic among individual borrowers, said Deputy Finance Minister Santi Promphat.
He said the meeting will focus on how to reduce the banks’ interest rates. If the interest is still high, it will be difficult to solve the household debt problem.
The planned meeting came after the government’s vow on Tuesday to tackle high household debt, incurred by credit card and personal loans, and offer measures to strengthen the competitiveness of local financial institutions in the long term.
Prime Minister Prayut Chan-o-cha said on Tuesday that all related agencies, including the central bank, are being ordered to accelerate addressing the debt burden among various groups of people.
According to Gen Prayut, the cabinet on Tuesday acknowledged the debt problem faced by various groups of Thais, particularly students, teachers, civil servants, car and motorcycle leasing clients and those who have taken out personal loans.
Mr Santi said the premier considered the debt issue an urgent task. He added that the collaboration of all related parties, including the central banks and the state banks, is needed to tackle the household debt.
Thailand’s household debt stood at 14 trillion baht in 2020, equal to 89.3% of GDP.
According to data from the central bank as of December 2020, the household debt burden was the result of credit cards and personal loans.
The debt burden covering principal loans and interest for these two unsecured loan products represented 58% of total consumer loans.
The central bank estimated household debt in the first quarter of 2021 grew by around 5% year-on-year. In the fourth quarter of 2020, household debt grew by 3.9% year-on-year.