11 July 2024

Prime Minister Srettha Thavisin declared the government’s determination today to address the chronic informal debt problem, which is affecting many people, by mobilising the police, local officials nationwide and the Finance Ministry to help in mediating settlement of informal debts with creditors in a manner which is fair to both parties and which will enable debtors to maintain their dignity.

At a press conference, held at Government House and attended by Interior Minister Anutin Charnvirakul and representatives from the police and Finance Ministry, the prime minister said that the government’s method to address the informal debt problem is different from that used by previous governments, because it is a collective effort by several key parties, particularly the police and local officials who are close to the problem, the creditors and debtors, with the government at the core of the debt mediation process.

He also warned that the government’s attempt to address this problem is not a cure-all that will eliminate the informal debt problem or prevent people from getting back into the vicious cycle of debt, but he hopes that the problem will ease substantially when the economy recovers.

The government has estimated the amount of informal debt at about 50 billion baht which, he admitted, may be an overestimate, adding, however, that they are placing special emphasis on this problem because many people are affected and, in many cases, repayment of the debts appears to be never ending.

He described the informal debt as “a modern form of slavery”, which has deprived many people of their freedom and dreams of a better life.

For creditors, many of whom are “influential” figures or who resort to violence or intimidation against the defaulting debtors, he warned that they will be dealt with strictly in accordance with the law.

Regarding the interest rate, if the informal debts are settled through mediation, he said the maximum should be 15% per annum, adding that, if it is discovered that a debtor has already repaid their creditor far in excess of the amount of debt owed, the debt will be scrapped.

As to the police and local officials, especially district chief officers who will play the key role in mediating between creditors and debtors, the prime minister said that the parties must understand their work process, to prevent overlap, while being collectively responsible with a clear-cut separation of duties.

He also emphasised the need for a central data system and the use of technology in the work process for greater efficiency.

The prime minister said he is scheduled to meet with district chief officers and police superintendents from across the country to emphasise their responsibility to address the informal debt problem, with the use of a key performance index (KPI) to follow up on their results.

Meanwhile, Interior Minister Anutin said informal debtors can register to get help, from December 1, at all provincial halls, district offices and Damrongtham centres.