SINGAPORE – Financial support for businesses will be stepped up to ensure continued access to credit despite the uncertainty caused by the coronavirus epidemic, Deputy Prime Minister Heng Swee Keat said on Monday (April 6th).
The government will increase its risk share of loans taken under several loan financing programs announced or improved in the 2020 budget in February and last month’s resilience budget to 90%, from 80%.
This applies to loans initiated under the Temporary Bridge Loan Program, SME Working Capital Loan Program, and Business Finance Program – Commercial Loan Program from April 8 of this year to March 31, 2021. .
The measure announced in parliament on Monday aims to provide additional support for businesses to cope with “circuit breaker” measures in the midst of the Covid-19 epidemic and to resume activities after the measures were lifted.
“The economy needs support and interventions in many different forms to get through this difficult time. I urge all businesses, owners, financial institutions and industry players to do their part to channel the measures of recovery. government support towards businesses, workers and households, ”said Heng, who is also finance minister.
The “circuit breaker” measures will see most businesses, except those in essential services, operate at a reduced level starting Tuesday for almost a month.
Heng noted that the Monetary Authority of Singapore (MAS), alongside financial institutions, has put in place a package of measures to help small and medium enterprises (SMEs) with temporary cash flow difficulties.
For example, SMEs can now choose to defer principal payments on their secured term loans until the end of 2020.
More than $ 40 billion in existing SME loans are likely to qualify for this relief, Heng said.
He added that banks and finance companies can also apply for low-cost financing through a new Singapore dollar MAS facility, for new loans under the SME Working Capital Lending and Loan programs. temporary transition.
They must commit to passing the savings on to the borrowers if they use this financing facility, Heng said.
Responding to the $ 5.1 billion solidarity budget unveiled on Monday, Ho Meng Kit, Managing Director of the Singapore Business Federation (SBF), said: “The solidarity budget is immediate, direct and substantial aid which our businesses need to survive the downturn and save jobs. . ”
The chamber of business has launched a hotline to help businesses navigate government coronavirus notices for businesses and is also working on a program to help businesses build resilience to current and long-term challenges, he added.
The Singapore International Chamber of Commerce (SICC) called the solidarity budget an “appropriate, rational and swift response”, noting the swift announcements of the three packages to help Singaporeans cope with Covid-19 in successive months.
But there is still a need for more banks to strengthen themselves and support more SMEs, granting loans without requiring SME owners to mortgage their homes, the SICC said, especially with increased government security taking on more risk. high.