Lenders to speed debt re­struc­tur­ing

Move will mean state won’t have to in­tro­duce new mea­sures

Bangkok Post - - BUSINESS - CHATRUDEE THEPARAT

Com­mer­cial banks and spe­cialised fi­nan­cial in­sti­tu­tions are be­ing urged to ac­cel­er­ate im­ple­ment­ing debt re­struc­tur­ing pro­grammes for their clients to help curb ris­ing un­em­ploy­ment.

Deputy Prime Min­is­ter Su­pat­tanapong Pun­meechaow said the banks’ ac­cel­er­ated debt re­struc­tur­ing should help im­prove the liquidity of their debtors and pre­vent ris­ing un­em­ploy­ment.

With this ef­fort, the govern­ment has no need to in­tro­duce ad­di­tional mea­sures, he said.

“I talked with the Fed­er­a­tion of Thai In­dus­tries and the Thai Cham­ber of Com­merce to pres­sure com­mer­cial banks to ap­prove their credit fa­cil­i­ties more quickly, es­pe­cially for small and medium-sized en­ter­prises (SMEs) that are reel­ing from the credit crunch,” Mr Su­pat­tanapong said.

How­ever, the govern­ment still plans to in­tro­duce ad­di­tional mea­sures in the last quar­ter, aim­ing to as­sist low-in­come earn­ers and stim­u­late con­sumer spend­ing.

He said the new stim­u­lus mea­sures may in­clude a fresh phase of the TasteShop-Spend scheme, which in­volves cash give­aways and cash re­bates or tax in­cen­tives to stim­u­late spend­ing.

“It is pos­si­ble that fresh ad­di­tional mea­sures will be vet­ted by the Cen­ter for Eco­nomic Sit­u­a­tion Ad­min­is­tra­tion next week,” he said.

In a re­lated devel­op­ment, Mr Su­pat­tanapong pre­dicted that the econ­omy is likely to get back to nor­mal in two years.

“In the past three months, the govern­ment has used about 800 bil­lion baht in sup­port­ing the econ­omy, 400 bil­lion of which was al­lo­cated to help 33 mil­lion low-in­come earn­ers and farm­ers,” he said. “I think the econ­omy should re­turn to nor­mal lev­els within two years, and if we can man­age it very well, the re­cov­ery is pos­si­bly vis­i­ble late next year.”

Danucha Pichayanan, deputy sec­re­tary-gen­eral of the Na­tional Eco­nomic and So­cial Devel­op­ment Coun­cil, said the think tank and the cen­tral bank are look­ing for ways to re­lax the 500-bil­lion-baht soft loan con­di­tions for bet­ter ac­cess to SMEs.

The cen­tral bank has been of­fer­ing 500 bil­lion baht in soft loans at 0.01% in­ter­est to fi­nan­cial in­sti­tu­tions for two years to ex­tend to SMEs with a max­i­mum credit line of 500 mil­lion baht at 2% in­ter­est. The govern­ment will ab­sorb in­ter­est charges for six months for SMEs that re­ceive soft loans.

To be el­i­gi­ble, SMEs must op­er­ate do­mes­ti­cally, be non-listed com­pa­nies, have a credit line of up to 500 mil­lion baht from fi­nan­cial in­sti­tu­tions, and con­tinue to ser­vice debt or make late pay­ments within 90 days at the end of last year.

In a bid to cope with the im­pact of the out­break, the govern­ment in April launched a 1.9-tril­lion-baht pack­age, mark­ing the big­gest re­lief mea­sure ever, to soften the eco­nomic blow. The pack­age in­cludes a 1-tril­lion-baht bor­row­ing plan.

Mr Danucha said bor­row­ing lifted the ra­tio of public debt to GDP to 47% in July, up from 41% in early 2020, with the ra­tio likely to rise to 57% next year.

Peo­ple queue at a So­cial Se­cu­rity Of­fice for com­pen­sa­tion for un­em­ploy­ment caused by the Covid-19 out­break.

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