People's Bank safe despite bad debts
The Government Savings Bank is committed to moving ahead with the People's Bank scheme despite having to write off bad debts and the increasing amount of non-performing loans (NPLs).
"Though the scheme has created NPLs, it is benefiting grassroots people. Lending to them so they can finance their businesses will benefit the economy as a whole," Woravit Chailimpamontri, GSB's first senior executive vice president, said yesterday.He said that over the past five years, GSB had extended Bt30 billion worth of loans to 1.3 million borrowers. Outstanding loans now stand at Bt6.8 billion, shouldered by 300,000 borrowers. Of the total, Bt1.1 billion worth of loans to 80,000 borrowers have turned out to be bad, representing about 15 per cent-16 per cent of the outstanding loans. So far this year, Bt10 million worth of bad debts, loaned to 1,000 clients and overdue for more than two years, have been written off, he said. Woravit added that the bank was restructuring the remaining NPLs. Forty per cent of the NPLs, or about Bt400 million, are more than 12 months overdue. The rest are less than 12 months overdue. Woravit said the People's Bank scheme would be extended to provide funds for grassroots people, though the amount of available funds would be capped at Bt10 billion. "Overall, the scheme is successful in helping 1.3 million people," he said. The Nation
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