The Thai Bankers’ Association (TBA) announced at the press conference the ‘You Fight, We Help’ Project (Khun Soo, Rao Chuai) to assist the retail and small SME debtors
Household debt is one of the crucial structural problems affecting the well-being of the people and the sustainable growth of Thailand’s economy. The government and the Bank of Thailand (BOT), therefore, have realized its importance and continuously collaborated on better approaches.
The Responsible Lending guidelines which came into effect at the beginning of 2024 laid the foundation for sustainable solutions to address all debtors’ issues. These guidelines strictly oversight the financial institutions, requiring them to facilitate customers who struggle with repayment by restructuring debt both before and after becoming a Non-Performing Loan (NPL).
However, economic growth remains uneven across sectors. The household income and SME revenue have not yet fully recovered, while, the debt burdens, living expenses, and business operation costs remain high. As a result, many persistent debtors still lack of debt payment abilities.
To assist the retail and small SME debtors, the Ministry of Finance, the Office of the National Economic and Social Development Council (NESDC), the Thai Bankers Association (TBA), the Association of International Banks (AIB), the Government Financial Institutions Association (GFA), including Non-Bank operators have cooperated to additionally introduce temporary measures under the project named ‘You Fight, We Help’. This initiative aims to provide assistance to retail and small SME debtors, incorporating mechanisms to promote financial discipline while preventing future issues of moral hazard in debt repayment.
The ‘You Fight, We Help’ project is considered a collaboration effort from both government and private sectors, including debtors themselves, to address problems of persistent debts. Debtors are required to register to apply for this project under repayment conditions, while the government and financial institutions will jointly contribute half of the debt amount (50%).
The project ‘You Fight, We Help’ consists of 2 measures as follow:
Measure 1 “Direct Pay-Retain Asset” aims to assist mortgage, auto loan, and small SME debtors having modest loan credit by restructuring debt, reducing installment payments, and suspending interest obligations for a period of three years.
Under this measure, the installment paid will be used for principal reduction and interest deferring for three years, if the debtors strictly follow all conditions (payment on time and refrain from additional loan agreements within the first 12 months after registering for the program).
The “Direct Pay, Retain Asset” measure primarily aims to help modest loaners enabling them to retain their guarantee assets such as houses, cars, or business premises while reducing their current and future debt burdens. The reduction in installments provides debtors with leverage liquidity for living expenses during the program, while the waived interest helps lower the overall debt burden.
Measure 2 “Pay-Deal-Done” aims to alleviate the debt burden for retail customers classified as NPL with low balances (total credit not exceeding 5,000 baht). Under this measure, debtors are required to negotiate with creditors to restructure debt and make partial repayments. This allows retail debtors with NPL status to become settled status, allowing them to continue their lives and businesses.
At the initial stage, the ‘You Fight, We Help’ project, primarily focuses on debtors of commercial banks, and Specialized Financial Institutions (SFI). Then the customers of Non-Bank operators that are part of financial business groups affiliated with commercial banks provide additional support and may involve different details. This collaborative scheme aims to resolve household debt issues and broaden its scope to include a large number of debtors.
Mr. Pichai Chunhavajira Deputy Prime Minister and Minister of Finance stated that “The government recognizes the importance of addressing the debt issues of people. We believe these measures will help enhance the well-being and release the hardship of the citizens. The ‘You Fight, We Help’ project is a collaboration of government and private sectors to assist retail and small SME debtors, covering a total of 2.1 million accounts, representing 1.9 million debtors, with a combined debt amount of 890 billion baht. Not only solving the debt issues but also the upskill/ reskill training will be provided to enhance income generation for debtors. This project is one of many programs that the government put an effort to solve the problems and improve household income levels.
Dr. Sethaput Suthiwartnarueput, the Governor of the Bank of Thailand noted “Addressing household debt issues is one of the prioritized tasks that BOT has consistently pushed to help people have a well-being and promote sustainable growth of the economy. This project features 2 key points that are different from previous programs: (1) debt restructuring that aims to reduce the principal and ease repayment over 3 years to increase liquidity and (2) Co-payment contribution from the government and financial institutions to help reduce debtors’ payment obligations.
This project’s name reflects the collective commitment of all related parties. The ‘You Fight’ represents debtors' willingness to tackle and release debt challenges, while ‘We Help’ signifies the readiness of the government and financial institutions to alleviate burdens and accelerate debt resolutions. The program’s success lies in the collaboration between debtors, the government, and creditors aiming for sustainable solutions to debt problems.
Mr. Payong Srivanich, chairman of the Thai Bankers’ Association (TBA) affirmed that “the Thai Bankers’ Association and its member banks are ready to support the government through the “You Fight, We Help” scheme. This initiative is expected to help approximately 1.5 million accounts belonging to the customers of commercial banks including the financial creditors, amounting to over 400 billion baht in total debt. This collaboration among the government and private sectors under this project aligns with the strategic plan of TBA to manage household debt sustainably, ensuring no one is pushed out of the system due to its structure and or limitations. Under the ‘You Fight, We Help’ initiative, all sectors share responsibility equitably, mobilizing efforts to restructure and collectively drive sustainable solutions to household debt issues."
Mr. Giorgio Gamba, the president of the Association of International Banks (AIB) mentioned that “AIB fully supports the “You Fight, We Help” project to assist the retail and small SME customers. We are committed to actively contributing and resolving household debt issues in the country. In particular, we agree with the participation of the Financial Institutions Development Fund (FIDF) through co-payment measures in collaboration with the government to establish a central funding source. The AIB is pleased to cooperate and implement this project to help persistent debtors get through their debt obligations and move forward.
Mr. Vitai Ratanakorn, the president of Government Savings Bank (GSB) as CEO of the Government Financial Institutions Association (GFA) restated that “the Government Financial Institutions Association is ready to cooperate with the government and the Bank of Thailand (BOT) in the ‘You Fight, We Help’ project. These initiatives will take care of the customers who have the possibility to recover and repay debts. Additionally, mechanisms have been specified to promote financial discipline and to prevent the future from losing their repayment strictness. However, the GFA are currently in discussions with the BOT and the Ministry of Finance to provide further assistance to Non-Bank loaners. They are also exploring additional measures to extend support to a broader range of vulnerable groups without overlapping with the target group of this program. It is estimated that approximately 600,000 accounts will be qualified for assistance through the two measures with a total debt value of over 450 billion baht."
The Ministry of Finance, Bank of Thailand, Office of the National Economy and Social Development Council, Thai Bankers Association, the Association of International Banks, the Government Financial Institutions Association, and Non-Banks operators expect that this project will provide assistance for retail and small SME customers facing difficulties in debt repayment with the right approaches and could recover and resume their normal repayment after this project concludes. Additionally, all related parties are committed to working together to address household debt issues. Customers interested in participating in these measures can register to apply and review all details at https://www.bot.or.th/khunsoo website from December 12, 2024 – February 28, 2025.
Ministry of Finance
Bank of Thailand
Office of the National Economic and Social Development Council
Thai Bankers' Association
The Association of International Banks
The Association of State Financial Institutions
Non-Bank Operators
December 11, 2024
