Today (11 Nov), the Ministry of Finance and the Bank of Thailand (BOT) will present the “Non-Performing Loan Resolution Project through the Debt Purchase Mechanism by Asset Management Companies (AMCs)” to the Cabinet for consideration, with plans to begin implementation early next year.
In principle, the proposal is to approve allocating 0.23% of the contributions, which the government has reduced collecting into the rehabilitation fund, to allow Asset Management Sukhumvit Company Limited (SAM) and Ari Asset Management Company Limited (Ari-AMC) to jointly purchase non-performing loans — specifically unsecured loans overdue more than 90 days — from financial institutions and non-bank entities.
The project has two main objectives: to help distressed borrowers who previously had no viable debt resolution options to re-enter debt restructuring with more lenient terms, and to reduce Thailand's household debt-to-GDP ratio below 80% from the current 16.3 trillion baht, or 86.8% of GDP.
This does not yet include strategies for purchasing non-performing loans from non-bank entities outside the formal financial system, or establishing new AMC joint ventures to acquire other distressed loans outside Thailand’s financial system, which could further lower household debt levels.
However, the very high household debt problem is not unique to Thailand. Due to economic stagnation since the COVID-19 period, household debt in many countries worldwide has increased.
Recently, the Federal Reserve Bank of New York reported that US household debt rose to a record high of 18.6 trillion US dollars, or over 600 trillion baht, in the third quarter of this year — an increase of 63 trillion baht from the previous quarter. Of particular concern are defaults among younger generations, especially education loans.
Meanwhile, China's household debt in January 2025 was about 11.5 trillion US dollars, approximately 368 trillion baht, and defaults along with rising non-performing loans remain significant problems for China, with the working-age population being the largest group defaulting on payments.
The top five countries with the highest household debt ratios in 2023 were Switzerland at 128% of GDP, Australia at 111%, Canada at 103%, South Korea at 102%, and Hong Kong at 96%. All these countries are concerned about increasing loan defaults.
All this shows that the burden of overwhelming debt is clearly undermining the global economy. More important than each country's efforts to reduce household debt is figuring out how to ensure debtors currently in debt have sufficient capacity to repay, preventing repeated non-performing loans, restructuring that leads back to default, or a society overwhelmed by widespread debt evasion.
Mr. P
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