SUNDAY, February 25, 2024

Covid-19 pushed small debtors, SMEs into NPL territory: credit bureau

Covid-19 pushed small debtors, SMEs into NPL territory: credit bureau

The National Credit Bureau has reported that Covid-19 restrictions over two years have caused the non-performing loans (NPLs) of small-time borrowers and small and medium enterprises to rise to 200 billion baht and 320 billion baht respectively.

While reporting Thailand’s NPL situation at a recent seminar, the bureau also called on the government to come up with measures to help small-time debtors and SMEs, whose loans had become NPLs due to the Covid-19 crisis.

NPLs of small-time debtors and SMEs caused by the Covid crisis have been coded O21. The bureau said it learned that the O21 borrowers had been prompt with their payments before the Covid-19 crisis broke out in 2019 and their loans only became NPLs because they were unable to make payments for 90 days or more.

As of 2021 end, the bureau said there were 4.3 million NPL accounts, and 2.3 million of them were O21 NPLs worth 200 billion baht.

The bureau added that these O21-code debtors deserve help from the government because it is not their fault that they defaulted on their payments. It pointed out that these debtors were unable to pay their debts because they had complied with the Covid-containment measures taken by the Public Health Ministry.

The bureau also said the accumulated NPL of small-time debtors under all codes and categories at the end of 2021 stood at 950 billion baht, up 7.5 per cent compared to the end of 2020.

The accumulated debt (including NPLs) held by small-time borrowers can be divided by age group, with Gen Z (1997-2012) owing 97 billion baht, Gen Y (1981-1996) 4.5 trillion baht, Gen X (1965-1981) 3.8 trillion baht, Baby Boomers (1946-1964) 1.1 trillion baht and the Silent Generation (1928-1945) owing 26 billion baht, the report said.

Meanwhile, SMEs owe about 3.93 trillion baht, it said. As of the end of 2021, 286,300 SMEs with juristic entity status have accumulated NPLs worth 320 billion baht or 7.9 per cent of the overall loans for SMEs.

The report said SMEs that have been unable to service their debts hail from the hotel and food industry, property and construction, manufacturing, wholesale and retail, and the repairing of vehicles and motorcycles.

The report said SMEs from these five industries had accumulated NPLs worth 270 billion baht and have joined debt-restructuring programmes worth 250 billion baht.

The bureau also said that household debt is continuing to rise. As of the end of the fourth quarter of last year, household debt stood at 14.58 trillion, compared to 14.34 trillion at the end of the third quarter.

It said the Bank of Thailand has helped restructure 4.83 million household debts worth 3.19 trillion baht at the end of January this year.