The Monetary Authority of Singapore (MAS), together with the Association of Banks in Singapore (ABS) and the Finance Houses Association of Singapore (FHAS), today announced an extension of the existing industry-wide support measures for individuals and small and medium-sized Enterprises (SMEs) in Tier 1 and 2 sectors that continue to face financial difficulties due to the Covid-19 pandemic.

The extension is targeted at individuals and businesses who continue to experience cash flow difficulties, by giving them additional time to transition to full loan instalment repayments.

For individuals who have sustained recent income or employment impact, repayments on property loans will be reduced, pegged at 60% of borrowers’ monthly instalment until December 31. A loan tenure extension of up to 3 years can also be discussed with lenders.

They will also be eligible to convert outstanding balances on unsecured revolving credit facilities to term loans at a reduced interest rate.

Impacted individuals will also be eligible to extend loan tenures for debt consolidation plans by up to five years, while loan tenures on renovation and student loans can be extended up to 3 years. 

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The support measures are on an opt-in basis for individuals who can provide proof of income impact and with loan repayments that are not more than 90 days past due.

To ease cash flow for Tier 1 and 2 SMEs that have sustained recent revenue impact, eligible SMEs can apply for the Extended Support Scheme - standardised (ESS-S), which will be extended to September 20.

SMEs that are currently participating in the ESS-S may opt to defer 80% of principal payments on their secured loans granted by banks or finance companies as well as loans granted under Enterprise Singapore’s (ESG) Enhanced Working Capital Loan Scheme and Temporary Bridging Loan Programme for an extended period till September 30.

SMEs in Tier 1 and 2 sectors that have not participated in the ESS-S can also apply to their lenders to defer 80% of principal payments till September 30.

To be eligible to opt-in for the support measures, SMEs must not have loan repayments that are more than 30 days past due. Borrowers whose loans are already granted partial principal moratorium, should not have overdue payments on those loans.

To facilitate the restructuring of SMEs’ loans,the application window for the Extended Support Scheme – Customised (ESS-C) will be extended from June 30 to December 31. SMEs with more than one lender may approach any of their lenders to assess if they would benefit from a multi-lender restructuring programme.

This is expected to be the final extension of the industry-wide support measures. 

“This final extension will provide support for remaining borrowers still affected by the restrictions. With continued economic recovery and transition to an endemic Covid-19 situation, loan repayments must start normalising so as to minimise debt accumulation. We must pivot away from industry-wide credit reliefs to more selective support measures tailored to individual borrowers’ circumstances,” says Ravi Menon, managing director of MAS.

Photo: Bloomberg