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Debt relief likely ahead for farmers

SMEs also in line for rescue measures

PUBLISHED : 11 Sep 2023 at 04:11

A protest held by farmers outside the Finance Ministry last year. The farmers demanded the government step in to help with their debts owed to state-run banks. Arnun Chonmahatrakool

The Finance Ministry plans to roll out rescue measures by suspending debt payments for a period of three years for small-scale farmers and small and medium-sized enterprises (SMEs) for loan amounts not exceeding 1 million baht, according to a ministry source who requested anonymity.

The ministry source said small-scale farmers and SMEs account for around 90% of all debtors in this category of loans owed to state-owned financial institutions.

The ministry will propose the plan to Finance Minister Srettha Thavisin for his consideration by today, and bring it up at the cabinet meeting on Sept 13 for approval, said the source.

The source said the rescue measures include the suspension of both principal and interest.

The government will take over the interest burden for the suspended debt for three years. The scheme is expected to relieve the debt burden for farmers and SMEs who were negatively affected by the pandemic.

Moreover, the government wants the ministry to take care of other categories of debtors, including agricultural cooperatives, teachers, police officers and informal debt through debt restructuring programmes at state financial institutions, said the source.

The government is also looking at methods to help auto loan borrowers as delinquent payments are increasing.

A farmers’ debt moratorium project was initiated by the Thaksin government in 2001, with a moratorium on both principal and interest for a period of three years for small farmers with debt not exceeding 100,000 baht between April 1, 2001 and March 31, 2004.

A total of 2.25 million farmers took part in the project, accounting for 90% of eligible participants, which helped reduce the interest burden by roughly 18 billion baht.

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