MAS extends facility to support lending by banks and finance companies to SMEs

Singapore, 12 October 2020… The Monetary Authority of Singapore (MAS) announced today that it will extend the MAS SGD Facility for ESG Loans [1] (the Facility) to complement the six-month extension of Enterprise Singapore (ESG)’s Temporary Bridging Loan Programme  [2] (TBLP)  from 1 April 2021 to 30 September 2021.

2   The Facility will provide Singapore Dollar (SGD) funding at an interest rate of 0.1% per annum for a two-year tenor to eligible financial institutions [3] to support loans made under the TBLP and the Enterprise Financing Scheme – SME Working Capital Loan (the ESG Loan Schemes) from 1 April 2021 to 30 September 2021.

3   Since its introduction in April 2020, the Facility has disbursed a total of S$5.7 billion to eligible financial institutions in support of their lending to companies under the ESG Loan Schemes. Taken together, the Government’s risk sharing through the ESG Loan Schemes and MAS’ lower-cost funding through the Facility have helped to lower borrowing costs for local enterprises to a range of 1.5% to 3.0% per annum under the TBLP, from 6% or more for other unsecured working capital loans.

4   Ms Jacqueline Loh, MAS’ Deputy Managing Director (Markets and Development), said, “The MAS SGD Facility for ESG Loans complements MAS’ other liquidity facilities – the MAS SGD Term Facility and MAS USD Facility – which provide banks with greater certainty of access to central bank liquidity. MAS’ suite of liquidity facilities will continue to support banks and finance companies in providing credit to individuals and businesses in Singapore and the region, amid the economic headwinds from the COVID-19 pandemic.”

  1. [1]The launch of the MAS SGD Facility for ESG Loans was announced in MAS’ media release on 20 April 2020.
  2. [2]The TBLP was introduced in March 2020 for a year, to help companies access working capital for their business needs during the COVID-19 crisis. ESG announced on 12 October 2020 that the TBLP will be extended from 1 April 2021 to 30 September 2021.
  3. [3]Banks and finance companies participating in the ESG Loan Schemes are eligible to tap on the Facility.

 

Source: Monetary Authority of Singapore