Thailand plans US$1.98b loan programme for first-home buyers

[BANGKOK] Thailand is expected to roll out a 70 billion baht (US$1.98 billion) soft loan programme for lower-income first-home buyers, a senior finance ministry official said on Monday, as it seeks to stimulate domestic spending amid a sluggish economy.

Southeast Asia's second-largest economy is struggling to gain a strong footing almost two years after the army took over.

Loan applicants must be first-time buyers of homes not exceeding 1.5 million baht, Somchai Sujjapongse, permanent secretary of the Finance Ministry, told reporters.

"This is designed to be affordable for those with a 14,000 to 15,000 baht (US$395-US$423) monthly salary," he said.

Two state-owned banks will provide the loans, which will be submitted to the cabinet for approval next week, Somchai said.

Mortgage approvals have been difficult as commercial banks have tightened their grip on lending as sour loans have risen.

In October, the junta approved measures that include fee cuts and relaxed home loans to help low to middle-income earners to buy homes and to revive the property sector.

REUTERS