Bad Loans : Thaksinomics At Work

This is the reality of the so called "thaksinomics".

Not genius, not even a spark of intelligence : only silly populists schemes to give money around, in order to make the people buy products.

Good for the growth statistics, good to fool the foreign investors.

Bad for the future of the country.

Audit alarm at GSB loan project debt

The state auditor yesterday sounded the alarm over the government's populist policies after finding considerable amounts of non-performing loans (NPLs) in a finance scheme run by the Government Savings Bank.

A source at the Office of the Auditor-General (OAG) said the NPLs worth more than one billion baht, or about 17% of outstanding lending under the so-called People's Bank, were a cause for concern.

The bad debts had accumulated over the course of the past five years as small borrowers had been drawn to the project introduced by the Thaksin administration, said the source.

The bank may be forced to carry out a debt haircut on many of these bad loans that are believed to have been primarily used to finance the purchase of consumer goods rather than investing in projects.

The source said the OAG will issue a report on the NPLs and ask the GSB why it has allowed such a high NPL level.

"We're not saying there are irregularities or corruption at the GSB, but this may go to show that blindly serving the government's [populist] policy could bring trouble to a bank that was established almost a century ago," said the source.

The People's Bank scheme is part of the Thaksin administration-initiated community finance programme, which includes the one-million-baht village fund, to boost the economy.

Following Bangkok Post :

http://www.bangkokpost.com/News/06Sep2006_news001.php