Rapid Assessment for Resilient Recovery and ... - GFDRR

Table 21: Government
measures in the finance
sector
Government
Measure
3-year loan
suspension on
small loans from 6
SFIs
Status
Any loan to a borrower who has a total of loans (all FIs
included) of under THB 500,000, and who has been impacted
by the flood, is granted a grace period (on both principal and
interest payments) of three years. This applies to borrowers of
BAAC, GSB, GHB, SME Bank, Islamic Bank, and Secondary
Mortgage Corporation. Reportedly, the potential portfolio
involved is THB 90.5 billion, of which write-offs of 50% after
such a long grace period, plus interest subsidies (at 4%) of THB
10.9 billion were assumed. Thus cost to the government for this
intervention is assumed to be: Short-Term (S-T): 1.8 billion;
Medium-Term (M-T): 5.4 billion; Long-Term (L-T): 48.8 billion. 62
Details
Approved by
Cabinet
3-year loan
suspension on
agricultural loans
from cooperatives
All Cooperative loans to farmers are subject to the same
three-year grace period as BAAC. The Cooperative Promotion
Department estimates that it will have THB 7 billion of loans
eligible (of which, again, the team assumes 50% will not ever
repay), requiring interest rate subsidies to cooperatives of THB
2.5 billion, plus loss to the Cooperatives of 3.5 billion: (S-T: 0.6
billion; M-T: 1.0 billion; L-T: 4.4 billion)
Passed by
Cabinet, now
in effect
New loans and
grants for
flood-affected
cooperative
members
The Cooperative Promotion Department approved THB 0.1
billion in new loans to flood-affected members for 2011, and
expects to approve another THB 0.2 billion in such loans for
2012. This is on top of THB 0.9 billion in grants to replace
damage of cooperatives, and THB 1.0 billion in grants to
affected members (THB 5,000 each). (In total, S-T: 2.0 billion,
M-T: 0.2 billion)
THB 2.0 billion
already
approved, THB
0.2 billion
pending
New loans to flood
victims of SME
Bank
Up to THB 2 billion of new loans by SME bank will be fully
guaranteed by the government, i.e. any losses will be
reimbursed. 63 Loans can be up to THB 1 million each with a
fixed rate of 6 percent per annum, for a period of six years and
with a 2-year grace period. A separate Public Sector Service
Account was set up for this program. Full THB 2.0 billion
expected to be spent in the first six months.
Approved by
Cabinet
Low-interest loans
for impacted
farmers through
BAAC
Loans amounting to up THB 60 billion being offered through
BAAC (BAAC did not know how much interest rate subsidy they
would get, nor when they would be paid for this 64 ). Farmers
would also receive free seeds/breeding stock, and veterinarian
help. (S-T: THB 20 billion; M-T: THB 40 billion)
Approved by
Cabinet
Loans for
flood-impacted
large companies
from GSB
THB 15 billion in loans to be made available to large enterprises
impacted by the floods, for rehabilitation of their business
facilities and development of flood prevention measures. No
information on loan parameters. Funds to be fronted by GSB,
unclear if would be refunded by MOF. (S-T: THB 10 billion; M-T:
THB 5 billion)
Approved by
Cabinet
Retail loans to be
made available
through GSB
THB 20 billion of new retail loans to be available to flood-victims
through GSB. No other details available. Assuming GSB will
have to front the funds, unclear if/when these would be
refunded by MOF (S-T: THB 10 billion, M-T: THB 10 billion)
Approved by
Cabinet
Housing loans for
flood-impacted
borrowers, via
GHB and GSB
THB 30 billion of new housing loans for flood victims reportedly
to made available, through GHB and GSB. Funds not fronted
by MOF. No further details available (S-T: THB 15 billion, M-T:
THB 15 billion)
Approved by
Cabinet
Loans by private
banks to SSF
members or
companies
For up to THB 10 billion in loans, the Social Security Funds
(SSFs) deposits funds with commercial banks, once the loan
has been approved on both sides. Only SSF-listed companies
(1 million maximum) and SSF members (THB 50,000) are
eligible. Conditions unknown, but take-up is very slow. 65
Already
implemented
62 As per “Debt relief for farmers, small borrowers”, The Nation, November 16, 2011. Other reports suggest that the
government believes this measure will cost under THB 11 billion, this figure only reflects the cost of reimbursement of lost
interest – it assumes 0% write-offs.
63 According to representatives of SME Bank.
64 Indeed, it seemed that BAAC would have to raise savings to pay for these loans, inciting them to offer higher interest
deposits (up to 4 percent per annual) – as per “BAAC offers high-interest deposits”, The Nation, November 2,2011, and as
per meeting with senior managers at BAAC.
65 We are told that only a few million have been disbursed so far. Applications only accepted until April 2012.
THAI FLOOD 2011 RAPID ASSESSMENT FOR RESILIENT RECOVERY AND RECONSTRUCTION PLANNING
67