The Ministry of Finance is now undertaking it's effort to foster greater understanding among unofficial money lenders after many of them won't cooperate to register their businesses an apply for lending incense.
The move by the ministry came after no unofficial or unauthorized money lenders in 20 provinces submitted applications to legitimate their business into Pico-Finance institutions.
Under the tough law if they apply for Pico-Finance license, they are allowed to charge no more than 15% interest on loan. Currently some unauthorized money lenders charge as high as 20-30% interest rate a month.
According to the director of the Fiscal Policy Office Krissada Jina-Wicharana, a total of 155 unauthorized moneylenders have applied for licenses to operate Pico-Finance institutions.
This is however offset by worrying police reports of 62 arrests made for unauthorized money lending.
As such, the Ministry of Finance has delegated a team made up of officials from the Ministry of Defense, Ministry of Justice and police to visit the 20 provinces with the highest percentage of unregulated loans in the country which strangely has not received any application for license to operate Pico-Finance institutions.
The impetus for the trip is to meet with money lenders and make sure that they understand that if they did not apply for such licenses then they are still only allowed to charge interest rates specified by the law.
But he said application for Nano-Financing however has met with some degree of success with a total of 20 parties applying for licenses.
As of yesterday they have issued loans amounting to 3 billion baht in total nationwide averaging out to 10,000 baht per case.
Meanwhile the Bank for Agriculture and Agricultural Cooperatives along with the Government Savings Banks report that within only the last month they have granted loans for 21,000 persons amounting to 1.030 billion baht to clear their outstanding unofficial loans.
Source: Thai Public Broadcasting Service (Thai PBS)