Proposal to help low-income earners raises question on practicability.
THE GOVERNMENT’S proposed policy to provide housing loans to low-income earners sounds too good to be true.
So, while many cash-strapped people are quick to embrace it, several others have had strong doubts as their community leader has raised concerns about the policy’s practicality.
“I don’t have stable income. So, I really don’t think that a bank will give me a loan,” Thongyoi Wongsa, 56, said yesterday from her community in Khon Kaen province.
Finance Minister Apisak Tantivorawong recently revealed that the Government Housing Bank (GHB) would implement a special housing-loan programme for welfare-card holders.
“The repayment term will be up to 40 years, with a fixed interest rate of just 2.75 per cent during the first four years for a loan amount not exceeding Bt1 million,” he said.
He added that for loans exceeding Bt1 million but not over Bt2 million, the fixed interest rate would be at 3 per cent per annum during the first four years.
Welfare cards have been issued to more than 10 million Thais, each of whom earn less than Bt100,000 a year.
While the housing-loan project looks very tempting, Thongyoi still doubts whether it will really reach the poor.
“Although I am paid Bt3,000 a month, my job is not of a permanent type,” she said. “Will any bank grant me a loan?”
Thongyoi works as a road sweeper without any guaranteed income.
Her family has rented space from the State Railway of Thailand (SRT) at the rate of Bt1,950 a year and her house is a part of a railway-side community.
“We don’t have housing security because the SRT may ask us to relocate if it needs land to develop its dual-track railways,” Thongyoi said.
Jitti Cherdchu, who heads the Teparak Community in Khon Kaen, said he believed the bank would require guarantors and collateral before approving loans.
“Besides, the government would do better to focus on occupational and skill development for the urban poor,” he said. “That would be a long-term solution to various problems including housing and debts.”
Jitti argued that better skills would increase the urban poor’s job opportunities and likely raise their income.
“When they have enough income, they will be able to apply for housing loans,” Jitti said. “Without raising their incomes, the purchase of a house will only increase their debts”.
Nongkran Pamara, a worker at a fresh market in Phayao province, said she had heard about the project but had no idea how she could really take part in it.
“I have not heard any detail,” she said.
She said like most other daily-paid workers, she had to rent a room because she could not take out a housing loan.
“Instead of just paying rent, if we can pay money and own our housing unit in the end, that would be good,” she said.
Nongkran said if she was allowed to take the housing loan under the project for welfare-card holders, she would definitely join in.