Thailand: BoT lays out plan to reduce debt level

• The Bank of Thailand (BoT) has discussed with relevant authorities to seek ways to lower the country’s household debt, starting from co-operatives and student loans with a target to expand to cover farmer loans in 2022.
• The country’s household debt is made up of financial sources and loan sources, including those that are not under the BoT’s supervision. As a result, the central bank needs cooperation from other authorities to reduce the country’s household debt.
• In the initial stage, the BoT intends to focus on government agencies-related household debt, starting from co-operatives and student loans, said the BoT’s assistant governor, supervision group 2, Thanyanit Niyomkarn.
• In addition, Mrs Thanyanit said the BoT plans to expand its collaboration with the Bank for Agriculture and Agricultural Cooperatives (BAAC) to reduce farmers’ debt. Given the different borrower segments, risk profile, debt payment model of farmer loans that depend on the harvest season, the central bank needs more time to consider a farmer debt solution.
• In 1Q21, Thailand’s household debt increased to THB14.1tn or 90.5% of gross domestic product (GDP). Household debt was largely made up of commercial banks representing 43% of total debt, followed by specialised financial institutions at 29%, co-operatives at 15%, auto leasing companies at 6%, credit card and personal loans at 4% and others at 3%.

External Link : https://www.bangkokpost.com/business/2152695/bot-lays-out-plan-to-reduce-debt-level