‘Don’t politicise it,’ states Paetongtarn regarding proposal for private firms to handle household debts
PUBLISHED: 18 Mar 2025 at 20:20
Prime Minister Paetongtarn Shinawatra defended a controversial proposal to alleviate household debt, initially suggested by her father, former prime minister Thaksin Shinawatra, allowing private companies to purchase and manage debts from banks. The Prime Minister stressed, “The idea comes from someone with good intentions for the country. Don’t try to politicise the matter.”
Faced with a censure motion in the House next week, Paetongtarn noted that while her father cannot be directly referenced, the opposition intends to highlight his influence on her administration’s decisions.
She emphasized the need for discussions with her advisors and cabinet members regarding the proposal, stating, “There are still many procedures to follow. This is not about dominating the government; it’s simply a suggestion from someone knowledgeable. We will not impede any measure that benefits the country.”
During a recent campaign event in Phitsanulok province, Thaksin proposed that private firms acquire the debts owed by individuals to commercial banks, allowing debtors to repay their new creditors in manageable installments. He stated, “People shouldn’t have to pay the full amounts, giving them a chance to rebuild their lives and clear their names from the credit bureau’s blacklist.”
Emphasizing that no government funds would be needed for this initiative, Thaksin suggested that private companies could step in to alleviate the burden of household debt, which has long plagued the nation.
Finance Minister Pichai Chunhavajira indicated that debt restructuring is one effective means of easing repayment conditions for debtors through lower monthly payments and reduced interest rates. He also noted the potential of a “good bank-bad bank” model, similar to strategies employed during the 1997 financial crisis to manage bad loans.
Pichai remarked, “This model involves creating a ‘bad bank’ to separate non-performing loans from solid assets. Cooperation from banks as creditors will be essential, and some private companies may express interest in participating.”
However, he made clear that this is still in the conceptual phase, and gathering feedback from all stakeholders will be crucial as discussions with the Thai Bankers’ Association continue.
Criticism of Thaksin’s proposal emerged from former finance minister Thirachai Phuvanatnaranubala, who argued it fails to address the root causes of the debt crisis and merely shifts debts around. He stated, “Debts are just moved from one place to another.”
Current statistics reveal that household debt stands at 16.3 trillion baht, representing 89.6% of the country’s gross domestic product as of last year, according to Kasikorn Research Centre data. If private firms were permitted to buy these debts, it would require each firm to possess around 500 billion baht, necessitating at least 32 companies to handle the total debt burden.
