Under an ambitious government plan to provide debt relief for low-income earners in debt to loan sharks or illegal loan schemes, each of the estimated 1,700,000 debtors across the country is to be offered soft loans up to Bt200,000.
The joint cooperation scheme between the Finance and Interior ministries was initiated by Prime Minister Abhisit Vejjajiva. Under the plan, those eligible will be granted loans, which will be used to pay off loan sharks. The borrowers will then repay the loans to state-run banks over a long-term repayment period at a low rate of interest.
A database of all debtors is based on a national registration scheme established during the second Thaksin Shinawatra government known as the "poor people's registration". Finance Minister Korn Chatikavanij said yesterday he could guarantee that the huge amount of money to fund the debt-relief scheme could be mobilised.
A second registration to keep official records of eligible borrowers will be opened on November 19. The Provincial Administration Department said the 10-day registration exercise would require Bt27 million per day for ministry officials and personnel at the villager level to carry out the project.
Those established as eligible would be selected under a two-point criterion: they need to have the determination to wipe out their debts and are financially able to repay the government loans, Korn said.
He did not qualify the term "determination" needed as a basic requirement.
Two state-run banks, the Government Savings Bank and the Bank for Agriculture and Agricultural Cooperatives, will be primary sources of the funding, Korn said yesterday at a press conference.
The Interior Ministry will broker negotiations between loan sharks and debtors through a special channel at more than 2,000 offices made available by provincial authorities.
Interior Minister Chaovarat Chanweerakul said the Finance Ministry would be tasked with mobilising the funding while his ministry would be identifying eligible borrowers and brokering negotiations between them and moneylenders.
The entire relief scheme will be supervised directly by Abhisit, Korn said, adding that registration would also be open directly between debtors and the two state-run banks.
The first Thaksin government implemented a similar project in 2003 on a smaller scale. A national registration of "poor people", or "people living in poverty", was conducted in 2006 and a full-scale debt relief scheme was planned, before a military coup in September that year.