“Pichai” admits to facing major household debt problems, orders assistance in extending home loan repayments

Government House, The government is tightening the screws to solve the economic problem, hoping to revive it. Pichai, the Minister of Finance, admits that he has encountered a major problem regarding household debt, orders assistance in extending the repayment of home loans, reviews the minimum payment of credit cards, and restructures the debt of the Student Loan Fund. Mr. Pichai Chunhavajira, Deputy Prime Minister and Minister of Finance, said about the results of the economic cabinet meeting that at this time the economy is still sluggish. Signs of economic recovery are gradually recovering and the biggest problem is people's household debt, which will be home debt, car debt, credit card debt and debt for consumption. For home loans, the Government Housing Bank (GHB) currently releases approximately 34% of all home loans, with approximately 80,000 customers' debts not being repaid. The GHB has held debt clinics by talking to debtors to extend repayments until they are 80-85 years old or to adjust the in terest calculation criteria. At present, more than 50,000 people have come to talk to the GHB. The Prime Minister has ordered that the GH Bank's assistance model be discussed and requested for cooperation from other commercial banks in order to prevent bad debt and to return to being a good debtor of commercial banks in the future. The Bank of Thailand is also present at today's meeting, so I would like to leave this matter with you. Mr. Pichai said that for credit card debt, there are currently 24 million credit cards in total, 1.1 million of which are in default and another 200,000 are in default, totaling more than 130,000. The assistance is provided through the Debt Clinic to extend the repayment period and reduce the interest rate by 3-5%. Currently, there are credit card companies providing cooperation and asking the Bank of Thailand to contact major credit card companies to join the Debt Clinic, as well as asking the BOT to consider reviewing the minimum credit card payment from 8% back to 5%, which the BOT representative will urgently consider. Mr. Pichai revealed that the economic cabinet meeting discussed the Student Loan Fund (SLF) debt, which has more than 4 million borrowers, paying only 1% interest, but if the debt is defaulted, the interest will increase to 18%, causing those in debt to be unable to repay the principal and also causing problems for guarantors, some of whom are over 40 years old and still in debt to the SLF. Therefore, the meeting ordered the SLF to adjust the figures because the new interest rate law only charges a default fee of 0.5% and to calculate retrospectively from the time of the loan, which found that 170,000 people paid more than expected, and must pay back 2.1 billion baht. Another 2 million people who are still in debt but the debt is too high because the old interest rate is used will reduce the debt by another 54 billion baht. By looking at the information from educational institutions that borrowed and made new contracts, the burden on guarantors will be immediate ly eliminated because there will be a new calculation, which will help reduce the debt by 56 billion baht, helping 2.8 million SLF debtors. Mr. Pichai mentioned additional economic stimulus measures while waiting for the 10,000 baht top-up project via digital wallets that in the short term, working people must recover first, especially those who still have debt problems. Therefore, the problem must be solved by extending debt to help reduce the burden. As for economic stimulus, it will be done gradually according to the economic situation that is gradually recovering, especially the tourism sector that is improving, which will result in the tourism-related business sector gradually recovering as well. Mr. Pichai said that the foundation of the Thai economy comes from the export and agricultural industries. In the agricultural sector, we must increase the yield per rai, including promoting domestic investment. Although the results may not be seen within half a year to a year, it is a good sign that helps dev elop the potential of Thai workers. For the approach to building confidence among the public, since most people are currently not willing to spend money and also have debt problems, Mr. Pichai said that the public will observe what the government and private sectors are doing together, whether what is done and whether it is implemented and has results, which he believes will increase public confidence. Mr. Pichai added that the economic cabinet meeting assigned the Ministry of Commerce to create a fruit calendar so that it would know when each type of fruit is in season and when there is a surplus of produce, and to make a table and show where the surplus would be given to, whether to large Thai traders or sent to another place or how to increase distribution channels. He also asked for cooperation from large producers to help reduce product prices in addition to the Blue Flag program. Source: Thai News Agency