New package to resolve unorganized debt problem

[webfact]

New package to resolve unorganized debt problem

 

 

BANGKOK: -- The cabinet has approved a package of measures aimed to resolve the long-standing unorganized debt problem which is now affecting 1.2 million people piled up with over 120 billion baht in unorganized debts.

 

The package is also intended to creditors of the unorganized debts to enter the legal lending system through the so-called Pico Finance. A new lending law will be introduced under which a creditor can charge his/her clients of up to 36 percent interest rate per annum without the need of a surety or a collateral. Violators who overcharge will face a jailterm of up to two years and 200,000 baht in fine.

 

Those who want to enter into the business of providing loans under Pico Finance programme will have a registered capital of at least five million baht. The maximum amount of loan to be extended is 50,000 baht with interest rate of not exceeding 36 percent per annum. Loans can be extended to clients in provinces where the head offices of the operators are located so that the operators can keep track of their debtors.

 

Pico Finance is the latest programme to be introduced by the government to resolve the unorganized debt problem after all the other measures such as nano finance have failed.

 

Latest report said that 1.2 million people remain stuck in unorganized debts totaling about 120 billion baht.

 

Full story: http://englishnews.thaipbs.or.th/new-package-resolve-unorganized-debt-problem/

 

-- © Copyright Thai PBS 2016-10-05

[jerojero]

Why would underground lenders want to charge 36% per year instead of usual 36% per month!

[HoboKay]

Nano finance failed so it's time to Pico finance to work wonders?

 

There's probably a Femto Finance that facilitates 5,000 Baht loans at 36% per annum waiting to come into play?

[PatOngo]

Cool! Borrow your way out of debt.........That'll work!

[maoro2013]

The debt is only 'unorganized' as far as the government is concerned, in my opinion a very strange way to to describe this.

 

36% per annum is not bad, I don't get that.

[waldroj]

We've had more money thrown at SME's with questionable success prospects, debt assistance for teachers living well beyond their means, and now a "legal-lending" solution to the unorganized debt problem! Of course, none of these policy initiative are intended to be populist.

 

Regardless, one has to wonder what Thailand's psudo-ministers actually talk about when the Cabinet gets together?

 

Back in May, we had Finance Minister Apisak Tantiworawong saying, "...In the past many attempts have been made to tackle the problem but most have met with failure and most of the unregulated loans were left to deteriorate into bad debt or non-performing loans...". (see http://news.thaivisa.com/thailand/finance-now-looks-to-pico-finance-to-help-the-poor-out-of-heavy-debts-from-loan-sharks/143224/)

Despite this cautionary warning, we now we have an advisor to Commerce Minister Mrs. Apiradi Tantraporn saying, "...the package was not intended to drive people deeper into debts but to free them from the burdensome unorganized debts...".

 

As if that's not enough, we are also told that cabinet "...instructed the Government Savings Bank and the Bank of Agriculture and Agricultural Cooperatives to each set up a special department to take care of low income earners by enabling them to have easy access to funding in case of emergency...".

 

One can only pity the "elected" government when it tries to run the country with no money in the kitty.

 

[adhd]

thailand, where loansharking just became LEGAL ...

 

can I as a farang, lend money for 10 percent per year and be sure if the debtor does not pay, I can go to the government to get my money ?