To assist citizens and businesses facing liquidity issues during this period, the Government Savings Bank has revised its loan criteria in response to the COVID-19 crisis, shifting from cash flow assessments to using collateral as the main criterion.

 

        Mr. Witthaya Rattanakorn, Director of the Government Savings Bank stated that the economic activities have been adversely affected by COVID-19, necessitating a temporary halt, which in turn impacts the income of citizens and entrepreneurs. Analyzing the income of loan applicants suggests that it may not be viable for the next 1-2 years. Therefore, if the criteria are not adjusted, borrowers may not qualify for loans, potentially leading to bad debts for the bank.

         Regarding the management of bad debts, the Government Savings Bank is confident that it can keep the bad debt ratio within the target of no more than 4% this year. To ensure the bank's stability, additional reserves will be set aside to accommodate potential future bad debts. Although this may reduce the bank's profits, it will ultimately strengthen the institution.

         In terms of lending, the car registration loan program, which uses vehicles as collateral, will see interest rates reduced to 18%, down from the market rate of 24-28%. Additionally, SME loans secured by land will be offered at a rate of 5.99%, significantly lower than the market rate of 15-30%. This adjustment is expected not to lead to losses for the bank, as there has been a high demand for SME loans, fully utilizing the initial budget of 5 billion baht, prompting the Government Savings Bank to increase the budget by another 5 billion baht to support SMEs.