THURSDAY, March 28, 2024
nationthailand

State banks ordered to help fend off land forfeitures to loan sharks

State banks ordered to help fend off land forfeitures to loan sharks

Finance Minister Sommai Phasee has instructed the four state banks to give a helping hand to low-income debtors in danger of losing their land that they used for collateral to borrow outside the system.

The order came after Prime Minister Prayut Chan-o-cha expressed concerns over low-income earners and farmers who have been hit by the protracted slowdown of the economy and are unable to pay back their loans. Their lack of liquidity has contributed to a rise in non-performing loans (NPLs) in and outside the financial system.

 

"State banks’ customers can already access their services but non-customers can also apply for the Bank for Agriculture and Agricultural Cooperatives’ provision of [low-interest loans of] up to Bt100,000 per farmer, while the Government Savings Bank can provide up to Bt500,000 for low-income earners," Sommai said after a meeting with the state banks yesterday.

"Small and medium-sized businesses can also get [assistance] from the Small and Medium Enterprise Development Bank, and the banks have agreed to take care of more of such customers."

The Interior Ministry has estimated that around 90,000 low-income earners, farmers and SMEs are in danger of losing their land to loan sharks, Sommai said.

"We can help them save their land but we must not forget that doing so might increase the NPLs in the system, so there must be a balance here. The state banks cannot help everyone, since they can only help people who have the [ability] to pay back their loans, but they have promised to extend the service in this matter to cope with the increase of demand."

The setting up of a state land bank is not feasible, since |the government does not have enough capital to cover it, he added.

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