Govt stresses commitment to ending informal loans

Thai Prime Minister, Gen. Prayut Chan-o-cha.

Bangkok – The government has reiterated its commitment to putting an end to the issue of informal loans or non-conventional debt, which it sees as an adversity faced by the poor and many agriculturists.

Because of difficulties finding adequate access to credit, numerous people have come to depend on “non-conventional” financial sources with high interest rates. This has created a major debt load for these people and has led to many problems, such as crime and family conflict.

The government has been mobilizing efforts to ease people’s suffering stemming from their level of debt from non-conventional loans. It has come up with five measures to tackle the issue in an integrated manner and on a sustainable basis.

In the first instance, firm action will be taken against informal and unregistered creditors over their illegal acts, such as the charging of excessive interest rates. The second measure seeks to provide debtors trapped in this system, as well as the general public, with greater access to conventional financial sources.

The third measure involves a compromise with creditors in order to reduce the burden of debtors.

The fourth measure seeks to increase the employment potential of debtors with non-conventional loans, so that they can earn more money for debt repayments.

In the fifth move, relevant agencies will be provided with support to enable them to effectively ease the problem of non-conventional loans. Community financial networks will be created and encouraged to help tackle this problem and provide their people with better financial knowledge and functional skills.