Thai central bank prolongs debt moratorium for SMEs amid COVID-19

Source: Xinhua| 2020-10-18 00:01:12|Editor: huaxia

BANGKOK, Oct. 17 (Xinhua) -- Thailand's central bank on Saturday announced on its website an extension of grace period of debt moratorium for Thai small and medium-sized enterprises (SMEs) as many of their businesses have been adversely impacted by COVID-19.

The Bank of Thailand (BoT) extended the debt moratorium period to June next year for small and medium-sized enterprises (SMEs) with a credit line below 100 million baht (3.2 million U.S. dollars) and difficulty in servicing existing debts, the BoT said.

The extension grace period will end on June 30, 2021.

The extension would only apply to targeted SMEs that cannot cope with repaying loans to financial institutions due to business operations not being fully recovered, said the BoT.

The debt relief measures were initially implemented by the central bank on April 23 and were scheduled to end on Oct. 22.

The BoT indicated that the value of debtors receiving debt relief measures in the formal banking system totals 6.89 trillion baht (22 million U.S. dollars), with 1.35 trillion baht (4.3 million U.S. dollars) attributed to SME loans of 1.05 million accounts.

"SME debtors whose creditors are specialized financial institutions, with loans totaling 400 billion baht, will continue to be under the debt moratorium scheme for another six months," said Roong Mallikamas, BoT's assistant governor. "The majority of SME debtors, owing a combined 950 billion baht to commercial banks and non-bank companies, also intend to repay their debts."

"The BoT has been monitoring the situation closely and expects that there won't be a lot of debt defaults in a very short time after the debt moratorium scheme ends," Roong said.

Roong also said that debtors are still shouldering interest burdens during the debt moratorium, while targeted measures are a means to discourage moral hazard, as some debtors, who have not been heavily affected by the crisis, may opt to take this opportunity to delay debt repayment.

The BoT assistant governor said she is optimistic to an eventual economic recovery.

Businesses related to drinks, agriculture, appliances and petrochemical products have seen a good recovery, according to Roong.

The assistant governor also believed that the Thai government's much touted Special Tourist Visa (STV) scheme offered to long-term tourists would help the tourism industry slowly pick up. Enditem