Government Savings Bank will be asked to lend money to debtors of non-formal lenders

[Lite Beer]

Government Savings Bank will be asked to lend money to debtors of non-formal lenders

BANGKOK, 5 July 2014 (NNT) – The National Council for Peace and Order (NCPO) will ask the Government Savings Bank to lend money to debtors so they may switch over from loan sharks.

Air Force Commander-in-Chief Prajin Jantong met with Network Center of Bangkok 24 Hours president Khosit Suwinitchit and around 100 representatives of debtors of non-formal loans on Friday. The group discussed current developments in the NCPO's drive to resolve the issue of non-formal loans.

According to the Air Chief, he will ask the Government Savings Bank (GSB) to speedily lend to the debtors so they could repay non-formal lenders. The Bank for Agriculture and Agricultural Cooperatives (BAAC) may also be asked to help lend to the debtors as well. Related agencies will also be asked to scrutinize non-formal lenders who tend to use violence to extract payment.

The Air Force chief's comments were echoed by Mr. Khosit, who proposed that the NCPO look into loan sharks' use of violence and supportive measures for banks to lend to those indebted to loan sharks. According to data from the network, there were around 2.2 million households that owed money to non-formal lenders.

-- NNT 2014-07-05

[terryp]

IDIOTIC...how about arresting the loan sahrks and then CANCEL all the loans outstanding?

[NeverSure]

But there's no corruption in Thailand any more.

By the way, this is the same bank that's already tits up from rice scheme loans.

One more time: The reason the government can't sell the rice stocks at market price is because it is the collateral for at least 700 billion baht of loans for the rice scheme. If the rice is sold, the bank will have to "realize on its books" (correct term) the loss on its books and show that it is broke.

Until rice is sold, the bank and government can pretend that there's enough rice to be collateral to cover the loans even though the actual market value of good fresh rice is only about 1/3 of what the government paid for the crap they have.

The government owns this bank and some would say that relationship has been seriously abused.

The rice is warehoused in a program that's called Catch 22.

Edited July 6, 2014 by NeverSure

[AGareth2]

cancellation of debt?

no

this is a good idea

[dcutman]

Not a good idea.

It hardly fair banks should have to be drug into this. There are reasons people use loan sharks, most of them not good.

[NeverSure]

No, the loan sharks must be repaid out of loans to the government from peoples' savings accounts because the sharks are the good guys and there's no corruption any more.

Oh wait.....

[NongKhaiKid]

How will this stop loansharking ?

They will continue to lend and that will include to those who may get a bail out under this scheme and there's a danger of a mind set that the GSB is there to cover debtors.

So when GSB or NCPO says ' no more ' what happens ?.

[Roadman]

The reason people use loan sharks generally is because they do not have equity to secure a loan from the bank, which flows mostly into they are a bad bank loan risk. The issue should not be making it easy for bad loan risks to free wheel of the banks but as always with Thailand again their number one failure of law enforcement. That being that in a modern society if you are stupid enough to lend money to people with no equity then you are not going to see your money returned meaning you take the loss. It does not give you the loan shark the right to kill, main and threaten. Until Thailand is prepared to enforce the law fairly and equally to all, and scrapes its ridiculous past and present patronage based society it is p!ssing into the wind with most of these issues.

[chainarong]

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IDIOTIC...how about arresting the loan sahrks and then CANCEL all the loans outstanding?

Not a good look this one , who are the idiots that thinking clicking their fingers will produce results, can the debtors repay, that is the question.

[Searat7]

Unfair to put banks in that position as 90% of the money they loan will not be collected . It is fairly certain that those using loan sharks are not credit worthy. I read that the junta is asking banks to loan more money to people to stimulate the economy but most families seem overloaded with debt already....adding more is a very bad idea.

Sent from my iPad using Thaivisa Connect Thailand

[BSJ]

Seems like a flawed scheme. People, who for whatever reason, can't borrow from a bank, who borrow from a loan shark are now to be given loans from the bank to repay the loan shark and the government is all for it!

How about my scheme: Round up the loan sharks, confiscate all their assets, put em in prison max for at least 10 years and cancel all the loans. Then make it clear any further loan sharking will be 20 years in prison and forfeiture on assets.

[Bender]

dumb and dumber, these people don't have a clue how to run a country!

the junta is just good enough to track missing rotten rice or reorganize the motosai service, nothing more.

[lostsoul49]

This is all starting to look waaaaaaay too populist.

Hunt down the sharks and put them in the pokey.

All loan sharks use violence and intimidation.... how else can they enforce their intent to get their money back without it.

Also, give even more prison to those who are police, starting with the big police boss who runs a large loaning network in my area and actually uses police to dish out the punishment, and I heard they kill too.

People are now just going to go straight to the sharks for loans and then transferring the loan and the payments directly to the bank who would have said 'NO' to them.

Edited July 6, 2014 by lostsoul49

[clockman]

The problem is, not enough jails! or people to run them.

[Suriya4]

Looks like govt is using tax payer money to pat loan shark. It's is better, and at no cost to tax payer by just issuing a new law to make loan shark illegal, hence no need to pay back.

[dcutman]

Seems like a flawed scheme. People, who for whatever reason, can't borrow from a bank, who borrow from a loan shark are now to be given loans from the bank to repay the loan shark and the government is all for it!

How about my scheme: Round up the loan sharks, confiscate all their assets, put em in prison max for at least 10 years and cancel all the loans. Then make it clear any further loan sharking will be 20 years in prison and forfeiture on assets.

I dont think your scheme is very practical for many reason, a couple of witch, there is not enough prison space and many people simply have no access to a legal loan and desperately need money .

IMO it would be better served to regulate loan sharks, register them, and maintain tight control on lending practices. People, could still have access to needed money and the government would be receiving income taxes.

If loan sharks dont want to play by the rules, then your scheme would come into effect.

[Thailand]

Thank goodness any populist policies are being avoided.

[Jeremy50]

Why don't they instead spend some time trying to teach the population the first rule of personal finance. If you don't have the money, DON'T BUY IT!

[Bender]

seriously, don't tell that these shark are so big and frightening that even the army fear to go after them, seriously?

Edited July 6, 2014 by Bender

[stubuzz]

Maybe the banks will take over the loans at higher interest rate than the sharks.

[Chao Lao Beach]

On the eve of the World Cup Finals....

[Kent1]

once you have the population owing the bank that is run by the government you will have control.

[Prbkk]

The old saying "be careful what you wish for" comes to mind.

[robblok]

I see benefits and I see problems

Benefits the people with the loans will have to pay normal interest (it could help a few people)

Drawbacks.. people loaning at loan sharks usually cant at a bank for good reason... also the fear of what will happen if they cant pay back is gone as they probably dirt poor with nothing to impound or sale.. just the fear of bodily harm from the loan sharks made them pay.

So this could give the banks a bunch of bad loans.

So this is certainly not without merits and without risks.

[Canada]

What a stupid idea.

[kingstonkid]

On face this is a great idea. The problems are that it lets the person off the hook and does not teach them about money handling so they will in a year at most be back at the lender looking for more money.

I think they need an HFC or AVCO here. The rates are high but people can get help.

[worgeordie]

Why are Governments always wanting to help people in Debit,

what about the people who have worked hard, never spent

more than they earned,saved up for their future,only to see

their savings eroded by inflation and very low interest rates.

regards Worgeordie

[apetley]

If you can't pay off a loan shark that is threatening to break your legs or worse where is the actual incentive to pay back a soft bank loan?

Huge number of defaults coming up in the not to distant future if this goes ahead imo.

Go directly after the cause would be the best answer but that is not going to happen considering the protection they are afforded.

[kimamey]

Looks like govt is using tax payer money to pat loan shark. It's is better, and at no cost to tax payer by just issuing a new law to make loan shark illegal, hence no need to pay back.

I think it's already illegal. Even if it isn't they are using violence to enforce payment which is against the law so they probably won't worry about breaking another one.

Edited July 6, 2014 by kimamey

[NeverSure]

Looks like govt is using tax payer money to pat loan shark. It's is better, and at no cost to tax payer by just issuing a new law to make loan shark illegal, hence no need to pay back.

I think it's already illegal. Even if it isn't they are using violence to enforce payment which is against the law so they probably won't worry about breaking another one.

This is the highly vaunted dictatorship, right? A dictatorship doesn't need a law. The constitution is suspended and the dictatorship is, by military power, the law.

The dictatorship can do whatever it wants. I'm curious as to why it doesn't what to cut the legs off of the loan sharks, but instead see to it they get paid with government taxpayer backed loans.