GSB plans to offer special loans to people shunning illegal lenders
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GOVERNMENT Savings Bank plans to launch a financial backup package offering Bt3 billion to Bt5 billion in loans charging special interest rates in the first year to those who want to shift their borrowing from illegal lenders.
“We have proposed to the Finance Ministry that it forward [this plan] to the Cabinet for approval as soon as possible,” GSB president Chatchai Payuhanaveechai told a press conference yesterday.
It will cover more than 100,000 of the approximately 1.2 million Thais who are debtors of illegal lenders, he said.
The bank will also propose to the Finance Ministry a package to restructure debts for its existing customers facing liquidity problems. Instalments would be lowered to match their monthly earnings.
This is the latest measure to reduce the number of people who have to borrow money from illegal lenders.
“We are providing a new financial package to lure borrowers who usually seek loans from illegal lenders. The latest research by GSB in May showed that 41.4 per cent of people in this group earn income that is lower than their expenses,” he said.
The bank also proposed to the Finance Ministry a relaxation of the rules for approving mortgages for first homes under the Baan Pracha Rath campaign.
Currently the bank has to reject half of the applicants because they are unqualified. Most of the rejected customers did not have sufficient purchasing power, he said.
GSB’s Grass-roots Economic Sentiment Index (GSI) for May dropped to 43.6 from 44.9 in April. Scores below 50 indicate a pessimistic outlook.
Grass-roots people continue to worry that their incomes are lower than their cost of living, consumer-product prices have climbed following rising oil prices, and the country’s economy is still growing slowly.
The survey for the GSI covered 1,530 people with incomes lower than Bt15,000 per month.
Chatchai said that although gross domestic product in the first quarter grew by 3.2 per cent – the best in 15 months – this had little impact on grass-roots people who continue to have low income but have to pay high living expenses.
The bank used the survey to design its financial package to serve customer demand and also proposed to the Finance Ministry that it find a financial package to serve grass-roots demand and improve their quality of life.
“We are the bank for people and communities, so we will find a way to support lower-income people and the community,” he said.
The bank has Bt2.2 trillion of the country’s Bt12 trillion in savings deposits.
GSB will host the World Savings and Retail Banking Institute’s “Banking in the 21st Century” meeting at the Avani Riverside Bangkok Hotel from June 29 to July 1.
Up to 500 WSBI members are expected at this event, where they will discuss the savings business in the 21st century.
