"Addressing high household debt," a long-standing problem undermining citizens' spending power, is one of five pillars in the 'Quick Big Win' plan to quickly revive the country, led by Prime Minister Anutin. He believes that if the government can help reduce citizens' debt burdens, people will have more money for daily expenses, boosting money circulation in Thailand's economy.
On 11 Nov, the Ministry of Finance and the Bank of Thailand (BoT) will present details of the plan to tackle non-performing loans (NPLs) through small debt purchases by Asset Management Companies (AMCs) to the Cabinet, aiming to resolve citizens' bad debt.
The basic principle is for two AMCs—Sukhumvit Asset Management Company (SAM), wholly owned by the Fund for Financial Institutions Development, and Ari-AMC, a joint venture between Government Savings Bank and Bangkok Commercial Asset Management Public Company Limited (BAM)—to buy NPLs (overdue by more than 90 days) from financial institutions and non-bank lenders, then manage those debts.
The debt to be purchased must be unsecured and already classified as NPLs by 30 September 2025, with total debt per borrower across all institutions capped at 100,000 baht.
The 100,000 baht limit is set to assist small borrowers in difficulty, as more than 50% of total system NPLs are under this amount.
Initially, the government expects about 3.4 million borrowers, or 4.76 million accounts, to join, totaling around 122 billion baht in debt. The first phase anticipates buying about 62.33 billion baht in debt from 2.36 million accounts, with over 80% consisting of personal loans and credit card debt, while mortgage debts are fewer and mostly related to foreclosed homes still owing money to banks.
This breaks down to about 1.5 million borrowers with 43.5 billion baht in debt from commercial banks and their subsidiaries, over 790,000 borrowers with 18.8 billion baht from state specialized financial institutions, and 1.2–1.6 million borrowers from non-bank lenders not affiliated with financial institutions, whose inclusion in debt purchases will be considered in later phases.
The government will support the purchase using approximately 26 billion baht remaining from the "You Fight, We Help" project, which came from reduced contribution rates of commercial banks to the Fund for Financial Institutions Development—from 0.46% down to 0.23%—to fund this program.
Measures are in place to prevent "repeated financial indiscipline" or moral hazard. Vithi Ratanakorn, the BoT Governor, affirmed that the debt purchase will be a one-time action to avoid debtors deliberately turning new loans into non-performing debts to have the state buy them repeatedly in cycles.
The idea to buy citizens' debts arose because the government aims to reduce household debt to GDP ratio—which remains very high—below 80%, noting that unsecured debts like credit cards and personal loans have surged, generating substantial NPLs. Importantly, many borrowers have shown little interest in restructuring their debts.
This aligns with a survey by TTB Bank of over 96,000 salaried workers between Aug 2023 and Feb 2025, finding 82% have debt, mostly personal loans and credit cards accounting for 53%. Some borrowers hold up to five such accounts, averaging 2–3 per person, and would stop paying these debts first if in distress, increasing NPL risk in this segment.
However, it is crucial to understand that "debt purchase" does not mean debt forgiveness or wiping debts away with the government paying on behalf of citizens. Our debts do not vanish; instead, the creditor changes from the original lender to a state-owned AMC, which will continue to collect debts from borrowers.
After purchasing the debts, the AMC will contact borrowers to restructure their loans to resolve the outstanding debts, potentially offering better terms such as waived or reduced interest, fees, or principal, with options to pay the remainder in a lump sum to close the account, or to reduce monthly payments and extend repayment periods. This may alleviate borrowers' payment burdens, enabling them to rehabilitate their credit.
Regarding removal from the blacklist of the National Credit Bureau (NBC) to enable new loans, the government will assign a special code 16 to participating borrowers (whose debts are transferred to the AMC) to facilitate quicker loan approval, though this depends on borrowers’ repayments and banks’ discretion.
The key highlight is that the extent to which AMCs can offer relaxed conditions depends on their cost to acquire the debts from financial institutions or non-bank lenders.
This price depends on the debt quality and chances of recovery. If recovery prospects are good, discounts may be modest, around 30–50%. If debt quality is poor with little chance of recovery, discounts could be as high as 70–90%. The BoT and Thai Bankers’ Association are expected to mediate to assess appropriate discount prices.
Another consideration is how much of the recovered funds the AMC can return after debt collection. This initiative is not a commercial debt purchase solely focused on company profit because the funds used belong to the Fund for Financial Institutions Development—that is, government money.
Therefore, when AMCs collect repayments, part of the proceeds should be returned to the state. The revenue-sharing ratio between the government and AMCs from debt recovery will also be clarified at the 11 Nov announcement.
These two factors serve as key performance indicators (KPIs) to assess AMCs' success in buying and managing debt and determine how much government funding the project requires, how much is recovered, and whether the results justify the reduction in household debt, increased spending power, and economic revival.
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