Former prime minister Thaksin Shinawatra has floated an ambitious idea to help the Thai people to clear household debt.
Though he was light on detail, he suggested that non-performing debt could be re-financed through its purchase from commercial banks, presumably by the private sector, but not at its full book value. It would then, he suggested, be managed by private asset management companies.
Through this approach, and presumably with successful refinancing having been achieved, he claimed that indebted Thais could see their names “removed” from the records of the Credit Bureau, without the need for the government to spend a dime of taxpayers’ money.
“I believe I can convince the private sector to invest in this endeavour, because the government is already overloaded with accumulated debt and must create as little new debt as possible, while generating new opportunities for the people,” said Thaksin, in his address to supporters at Phitsanuloke University yesterday.
He admitted, however, that it would be easier said than done, but insisted that it is one thing that the Pheu Thai party must do to help the people.
Thaksin also said that the Pheu Thai party plans to issue stablecoins, a digital asset which is supposed to be pegged to a reference asset, to be distributed to Thai people with the government providing a fund to support the stablecoins.
The Bank of Thailand, however, rejects this approach due to the huge amount needed to support the digital asset.
Nonetheless, he said that he believes cryptocurrencies, such as stablecoins, could help to boost the economy, as the Thai economy is sitting on weak foundations, which must be fixed before a collapse.
In an attempt to clarify Thaksin’s idea, Finance Minister Pichai Chunhavajira said that non-performing loans (NPLs) would be purchased from commercial banks and then managed by, probably, a governmental agency, which is yet to be created.
He also said that any private sector companies interested in managing the NPLs would be welcome, adding that the total amount of NPLs is just over a billion baht and include mortgages and vehicle hire purchase.
He made clear that performing loans would not be included in any such scheme.
The finance minister is scheduled to have a meeting with representatives of the Thai Bankers Association to discuss the matter today.
