Thai cabinet approves $2 billion soft loans for lower-income first-home buyers

Thailand's cabinet on Tuesday approved soft loans worth 70 billion baht ($2 billion) for lower-income first-home buyers, as it seeks to stimulate a sluggish economy via increased household spending. "The cabinet meeting today approved the programme for lower-income first-home buyers," Thai Finance Minister Apisak Tantivorawong told Reuters.
Southeast Asia's second-largest economy is in a slump amid a global slowdown and a decline in exports. Thailand wants to make it easier for first-time buyers to buy their own homes, but the country's households are among the most indebted in Southeast Asia, and Thai banks are rejecting around half the mortgage applications they receive.
Commercial banks have tightened their grip on lending as the number of non performing loans has risen. Earlier this month the finance ministry said applicants for the soft loans must be first-time buyers seeking homes worth not more than 1.5 million baht ($43,000). Three banks will provide the loans, Apisak said. The ruling junta, which took power in a May 2014 coup, has struggled to revitalise the economy. In October, it approved measures including relaxed home loan rules to help revive the property sector.