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Cabinet approves 560 million baht stimulus package


April 2, 2008

Cabinet approves 560 million baht stimulus package

Thailand’s Cabinet on Tuesday approved measures to inject money directly into the grassroots level via three state-owned banks, to the tune of 560 billion baht within 2008, Thai News Agency reported.

Speaking after the weekly Cabinet meeting, Deputy Finance Minister Pradit Pataraprasit said the proposal endorsed as initiated by the Finance Ministry contains measures relating to “job creations, reduction of expenses” to benefit mid-to-low income and grassroots people.

At the heart of the package is a three-year debt moratorium for over 300,000 farmers who borrowed less than 100,000 baht from the Bank for Agriculture and Agricultural Cooperatives (BAAC) and who could not pay back.

These farmers owe 18 billion baht to the bank, but have been given a two-year reprieve between  1 April 2008-31 March 2010. Over the period these farmers will undergo training and capacity building for them to get their businesses back on their feet.

As part of the stimulus package, the Government Savings Bank will also reduce interest rates from one per cent a month progressively to 0.5 per cent a month, in a move that’s expected to benefit over one million small borrowers. Only those with “good debt service record,” will be qualified. The GSB interest cut scheme is reckoned to be worth 5 billion baht.

In addition, the Government Housing Bank will make available 10 billion baht to lend to potential homeowners whose monthly income is below 15,000 baht, and whose loan portfolio amounts to less than 60,000 baht. This category borrows will get better interest rates and longer repayment period.

Together with various other loan schemes to promote crops for bio-fuel production and an increase in community lending, the grand total of money direct to grassroots levels approved by the Cabinet amounts to 569.7 billion baht.

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