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MAS (Monetary Authority of Singapore) is extending the MAS SGD Facility for ESG Loans to complement the six-month extension of the Enterprise Singapore (ESG) Temporary Bridging Loan Programme (TBLP) from 1 April 2021 to 30 September 2021.
The MAS SGD Facility for ESG Loans was launched in April 2020, and has to date disbursed a total SGD 5.7 billion to eligible FIs at a near-zero rate of 0.1% per annum for a two year tenor to support low-cost lending to SMEs under ESG Loan Schemes.
The loan schemes included the ‘Enhanced Enterprise Financing Scheme – SME Working Capital Loan’ (EFS-WCL) and the ‘Temporary Bridging Loan Programme’ (TBLP) – which was introduced in March 2020 to help companies access working capital for their business needs during the Covid-19 crisis.
On Monday (12 October), ESG announced that the TBLP will be extended from 1 April 2021 to 30 September 2021. Under the extension, the government’s risk-share on the loan will be lowered to 70% from 90% currently, with the maximum loan quantum lowered to SGD 3 million.
ESG also announced a similar extension and lower government risk-share for the Enterprise Financing Scheme – Trade Loan (EFS-TL), which supports the trade financing needs of local enterprises, subject to a maximum loan quantum remains of SGD 10 million.
ESG also enhanced the Enterprise Financing Scheme – Project Loan (EFS-PL), which supports companies in their internationalisation efforts, to extend support to construction companies to finance the fulfilment of secured domestic projects, from 1 Jan 2021 to 31 Mar 2022. The government will provide FIs a 50% risk-share; and 70% for young companies. The maximum loan quantum is SGD 30 million.
“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,” said MAS deputy managing director Jacqueline Loh.
“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.”
As a result of the government risk share and the MAS SGD Facility for ESG Loans, borrowing costs for local enterprises have been lowered to a range of 1.5% to 3.0% per annum under the TBLP, compared to 6% or more for other unsecured working capital loans, MAS said.
Last week, MAS, ABS (The Association of Banks in Singapore) and FHAS (Finance Houses Association of Singapore) announced an extension of support measures to help individuals and SMEs facing cashflow difficulties transition gradually to full loan repayments.
Source: https://www.regulationasia.com/mas-extends-liquidity-facility-for-fis-to-support-sme-lending/