Government Savings Bank (GSB) will seek approval from the Finance Ministry to lend an additional 5 billion baht through packages to help refinance underground loans owed by low-income earners in 2018.
GSB president and chief executive Chatchai Payuhanaveechai said the additional funding, 2.5 billion baht each from GSB and the Bank for Agriculture and Agricultural Cooperatives (BAAC), will help ensure that efforts to tackle loan sharks will be more effective in 2018.
GSB and the BAAC have been ordered by the government this year to set aside 5 billion baht each to refinance underground loans owed by low-income earners, particularly recipients of the state welfare and subsidy scheme.
The two banks have already extended 10 billion baht at 50,000 baht per person.
GSB estimated that by the end of this year it would be able to provide loans to 100,000 small-scale customers totalling 4.2 billion baht.
Mr Chatchai said the bank will also give as a New Year's gift a 30% rebate on interest expenses for borrowers with good payment records and debts not exceeding 300,000 baht.
The scheme will get started in January.
GSB also plans to offer special annual deposit rates of 3%, up from 1%, for those who have had savings accounts with the bank for five years.
The move is intended to encourage deferred consumption and create good financial records for future borrowing.
Mr Chatchai said the bank is offering low-interest loans to street food vendors of up to 50,000 baht a person.
He said previously that the bank would charge borrowers interest rates of 0.4-0.6% a month, depending on collateral value.
The scheme's rate is well below the monthly 1% rate offered through GSB's People Bank project.
Hawkers and vendors who sell food at shophouses and via mobile trucks are entitled to receive loans valued at up to 3 million baht each with a maximum repayment period of 10 years.
Interest rates for GSB loans to street food vendors are significantly cheaper than underground lending, Mr Chatchai said.
Those who borrow 100,000 baht via the bank's loan scheme will pay 66 baht a day to the bank on average, based on the five-year loan term.
Those borrowing 5,000 baht from a loan shark, in contrast, are liable to pay 1,500 in interest -- 500 baht up front and 250 a day for 24 days.
BAAC president Apirom Sukprasert said there are 3.95 million low-income earners registered with the Finance Ministry, 448,496 of whom have an average debt of 59,520 baht.
