Roughly 1.7 million debtors of non-bank financial institutions, with combined outstanding debt of 50 billion baht, are qualified for assistance under the second phase of the "You Fight, We Help" programme, according to the Finance Ministry's planning unit.
Pornchai Thiraveja, director-general of the Fiscal Policy Office, said non-bank financial institutions participating in the government's debt relief programme will receive soft loans from the Government Savings Bank (GSB), with a maximum of 5 billion baht per institution, to compensate for interest rate reductions offered to customers under this initiative.
Mr Pornchai said the government, in collaboration with the Bank of Thailand and financial institutions, launched the programme to assist debtors of commercial banks and specialised financial institutions by reducing the instalment burden and waiving interest fees.
The measure aims to increase liquidity and expedite debt repayment for eligible borrowers.
The collaboration also established guidelines, conditions and disbursement processes for a soft loan programme offered by the GSB to non-bank financial institutions.
The cabinet approved these measures at its meeting on Feb 11.
Mr Pornchai, also a spokesman for the Finance Ministry, said Muangthai Capital Plc and Aeon Thana Sinsap Thailand Plc have joined the programme, allowing retail borrowers from these non-banks to receive assistance under the programme's two measures.
The first measure dubbed "Reduce Principal, Reduce Interest" focuses on reducing the interest burden by prioritising repayment of the principal.
The measure is designed to assist debtors with car loans of up to 800,000 baht, motorcycle loans of up to 50,000 baht, personal loans under supervision with a total limit of up to 200,000 baht, digital personal loans with a total limit of up to 20,000 baht, and nano-finance loans with a total limit of up to 50,000 baht.
The measure helps non-bank debtors by reducing their instalment payments over three years to 70% of the original amount, and by reducing the interest rate from 25% per year to 15% per year over the three-year period.
The reduced interest is deferred and waived if the debtor complies with the terms throughout the duration of the programme.
The second measure called "Pay, Close, Settle" is for non-performing loans with outstanding debt of no more than 5,000 baht. Debtors only have to pay part of the debt to settle and close the debt immediately.
According to Mr Pornchai, to incentivise non-bank financial institutions to assist retail borrowers under these measures, the Finance Ministry established a 50-billion-baht soft loan programme through the GSB, available for a period of three years.
The loan limit for each non-bank operator is 5 billion baht, with the loan amount per operator depending on the revenue loss each non-bank institution experiences from assisting debtors.
The government will compensate the GSB for the cost of funds at an annual rate of 2.00% for a period of three years, totalling up to 3 billion baht.
He said the programme focuses on restructuring debt based on debtors' repayment capabilities, prioritising principal reduction to facilitate quicker debt repayment and improve access to formal credit.
This strategy aligns with the government's policy to drive systemic debt restructuring and provide a concrete solution to household debt problems, said Mr Pornchai.
