Bangkok: Woraphat is making swift moves to tackle the significant challenge of over 13.55 trillion baht in non-performing loans (NPLs), with half of these loans being unsecured. The strategy involves negotiating with banks to transfer the debt to asset management companies (AMCs). This week, discussions are scheduled with the Ministry of Finance, the Bank of Thailand, and the Bankers’ Association to advance these efforts.

According to Thai News Agency, Deputy Finance Minister Woraphat Thanyawong highlighted the urgency of addressing the household debt issue, with NPLs accounting for nearly 90 percent of GDP. The current situation is particularly concerning as 50 percent of the household debt is unsecured, posing unique challenges compared to other countries. To tackle this, the government is working with commercial banks to facilitate the transfer of NPLs to AMCs through the establishment of joint ventures. These ventures will negotiate the sale prices for the problematic debt, aiming to remove NPLs from the banking system swiftly to maintain liquidity and enable new lending.

A strategic roadmap has been set to address the overall debt problem, with discussions planned this week involving key agencies such as the Bank of Thailand, the Thai Bankers’ Association, and the Fiscal Policy Office. The aim is to collaboratively define effective approaches to managing consumer debt.

In addition to handling NPLs, the government is concentrating on boosting liquidity for small and medium-sized enterprises (SMEs). This involves collaboration with both private and state-owned commercial banks and utilizing the Small and Medium Enterprise Credit Guarantee Corporation (TCG) as a support mechanism. A new project with a 50 billion baht guarantee will be launched to provide credit support to commercial banks, facilitating lending and addressing economic challenges within a four-month timeframe.