Key Takeaways
- 3.8 million small borrowers with 120 billion baht in bad debt to get relief
- Government to buy debts from banks at low cost using existing funds
- First batch of 60-70 billion baht to be transferred to state asset managers
- Separate plan for 28,000 elderly borrowers with 5.5 billion baht debt
The Finance Ministry will present a major debt relief plan to the cabinet tomorrow, targeting 3.8 million small-scale borrowers struggling with 120 billion baht in bad debts. The initiative focuses on individuals with non-performing loans under 100,000 baht each.
Debt Purchase and Management Plan
According to ministry sources, the government will ask cabinet approval to purchase these bad debts from commercial banks and non-bank financial institutions. The debts will be transferred to state-owned asset management companies including Ari AMC and Sukhumvit Asset Management.
The first batch of bad debts earmarked for transfer is estimated at 60-70 billion baht. The purchase price from financial institutions will be very low, with total spending projected at just 10 billion baht.
Funding Source and Debt Distribution
Funding will come from the remaining 26 billion baht under the government’s “Khun Soo Rao Chuay” (You Fight, We Help) debt relief programme. Financial institutions have already fully provisioned for these bad debts.
Of the total 120 billion baht in small-scale bad debts:
- 1.4 million borrowers owe 35 billion baht to commercial banks
- 2.4 million borrowers owe 85 billion baht to non-bank institutions
BAAC’s Separate Initiative for Elderly Borrowers
Chatchai Sirilai, president of the Bank for Agriculture and Agricultural Cooperatives (BAAC), confirmed the bank has its own household debt restructuring policy. BAAC plans to separately manage bad debts of elderly borrowers aged 70 or older through its own asset management company.
This group includes approximately 28,000 borrowers with total debts around 5.5 billion baht. BAAC’s executive team will propose detailed plans for board consideration, including:
- Debt restructuring options
- Allowing heirs to assume debts
- Criteria for partial or full debt haircuts
- Government subsidy proposals
Thailand’s Household Debt Challenge
Household debt remains a major obstacle to economic growth in Thailand. The National Economic and Social Development Council (NESDC) reported the household debt-to-GDP ratio at 87.4% in Q1 2025, showing a slight 0.1% year-on-year decrease mainly due to tighter lending standards.
However, the NESDC expressed concern that stricter lending policies might push more people toward informal lending sources, potentially worsening the debt problem. This is particularly relevant as younger generations continue to favor “buy now, pay later” options.
The government has identified addressing household debt as a key priority and one of its five main pillars to be implemented within four months.
