Likens problem to modern-day slavery
PUBLISHED : 29 Nov 2023 at 04:00
Prime Minister Srettha Thavisin has declared tackling loan sharks and the problems they cause a national priority, and likened the situation some of their victims find themselves in to a form of modern-day slavery.
The prime minister emphasised the pervasiveness of high-interest informal debt that plagues Thai society, and pledged, in collaboration with administrative organisations and the police, to enforce laws on acceptable debt resolution.
The insidious impact that loan sharks have, not only on communities but the macroeconomic well-being of the country, is deeply entrenched in Thai society, with current outstanding loans estimated to be in the region of 50 billion baht.
“Personally, I think informal debt is modern world slavery, which deprives people of freedom,” said Mr Srettha.
Recognising that the public forms the bedrock of the nation, the prime minister underscored the need to break these cycles of perpetual debt woes, which ripple through every facet of the country.
The government wants to dismantle the informal loan system. Ensuring equitable treatment for both creditors and debtors within legal frameworks is a priority, he said.
The Royal Thai Police will work with the Interior Ministry to implement a centralised database and ID tracking system for the public.
“I urge the two agencies to work together under the same key performance indicator [KPI] and clear framework in an effort to achieve their goal,” said Mr Srettha.
After a process of reconciliation with creditors, the government plans to initiate debt restructuring. The Finance Ministry will provide financial advisers, tailoring specific terms and conditions to facilitate debt repayment for individuals.
“I am confident that the economy will improve and people will earn enough that they need not get involved with the informal loan system again,” said Mr Srettha.
The government also intends to streamline access to capital, said the prime minister, who plans to address universal debt issues on Dec 12.
Regarding post-reconciliation interest rates, Mr Srettha emphasised a cap of 15% per annum on what debtors will be legally required to pay. Moreover, excess payments by debtors could potentially lead to debt cancellation after adjusting interest rates.
Highlighting the government’s holistic approach, Mr Srettha said comprehensive plans to negotiate with both creditors and debtors would not only resolve the issue of loan sharks but also formal lending concerns.
Meanwhile, Interior Minister Anutin Charnvirakul urged victims of unfair treatment by loan sharks to seek assistance at designated centres across provinces and district offices in Bangkok. Since Oct 1, law enforcement efforts have resulted in 134 arrests related to loan sharks and the confiscation of assets worth 8 million baht, said deputy police chief Pol Gen Thana Chuwong.