Solidarity Budget: Government risk share of loans raised from 80% to 90%

The government is raising its risk share of loans in a series of bridging loans aimed at supporting Singapore firms amid the deepening coronavirus crisis, Deputy Prime Minister and Finance Minister Heng Swee Keat said.

This applies to the Temporary Bridging Loan Programme, the Enterprise Financing Scheme - SME Working Capital Loan, and the Enterprise Financing Scheme - Trade Loan, Mr Heng said as he delivered the Solidarity Budget in Parliament.

The government's risk share will be raised from 80 per cent to 90 per cent for loans initiated from April 8, 2020 till March 31, 2021, Mr Heng said.

Mr Heng noted that the Monetary Authority of Singapore (MAS), together with the financial institutions, also introduced a package of measures to help small and medium enterprises (SME) with temporary cashflow difficulties.

For example, SMEs can now opt to defer principal payments on their secured term loans till the end of the year, Mr Heng said, adding that more than S$40 billion of SMEs' existing loans are likely to qualify for this relief.

He also said banks and finance companies may also apply for low-cost funding through a new MAS Singapore Dollar facility, for new loans granted under the Enterprise Financing Scheme - SME Working Capital Loan and the Temporary Bridging Loan Programme. If they do so, they must commit to pass on the savings to their borrowers.

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"The economy needs support and intervention in many different forms to go through this rough patch. I urge all businesses, landlords, financial institutions and industry players to do your part, in channelling the government's support measures to firms, workers and households," Mr Heng said.