Bangkok: The Cabinet has approved the ‘You Fight, We Help, Phase 2’ project, a strategic initiative aimed at alleviating the financial burden on small debtors through measures such as the ‘Pay, Cut the Principal’ to facilitate reduced debt obligations, allowing debtors to pay 2 percent of the principal and benefit from a three-year debt suspension.
According to Thai News Agency, Ms. Sasikarn Wattanachan, deputy government spokeswoman, announced the Cabinet’s decision to implement the project through several state banks, including the Government Savings Bank, the Bank for Agriculture and Agricultural Cooperatives, and the Government Housing Bank, among others. These banks are tasked with aligning their credit lines to match the number of project registrants, in collaboration with the Budget Bureau for appropriate budget allocation considering each bank’s liquidity.
The Cabinet also sanctioned additional measures for retail debtors affected by COVID-19. These measures fall under the ‘Khun Sue Rao Chue Phase 2’ project, which, similar to its predecessor, targets vulnerable debtors with potential for financial recovery. This initiative seeks to uphold debt repayment discipline and prevent moral hazards through temporary support.
Key elements of the approved measures include the ‘Direct Payment, Asset Retention’ initiative, extending eligibility to debtors with payment arrears between 30 to 365 days. This measure also covers those who have undergone debt restructuring since January 1, 2022, under fair lending practices expected to continue in 2024.
The ‘Pay, Close, Finish’ measure broadens the scope for individual debtors in arrears for over 90 days, imposing limits on unsecured and secured loans while allowing participation across multiple accounts, as per the Cabinet’s December 11, 2024 resolution.
Additional restructuring measures for unsecured non-performing loans introduce the ‘Principal Payment Measure.’ This allows for debt restructuring with a 2% monthly installment for three years, suspending interest payments for the same duration. Debtors must refrain from new consumer debt in the first year and may receive interest waivers if compliant throughout the period, with financial institutions sharing the waived interest costs with government funding.