Singapore’s central bank has just recently announced that local lenders will offer more relief for consumers and businesses that have been put under siege by the sharp economic dip and COVID-19 outbreak. Some of these aid measures include a freeze on mortgage and business loan payments and cuts to credit card rates.
Banks and finance companies can defer both principal and interest payments for qualified clients with residential mortgages through 31 December, the Monetary Authority of Singapore (MAS) said in a statement on 31 March. SMEs also have the option of deferring principal payments on their secured term loans until the end of the year.
The central bank’s latest loan relief adds several other fiscal and monetary measures the city state is employing after the coronavirus pandemic induced the worst economic downturn in a decade in the first quarter. More than S$40 billion US($28 billion) of existing loan facilities to small businesses will likely qualify for the relief plan.
“The shock to the economy from the Covid-19 outbreak is unprecedented. We must take extraordinary measures to address not just a health crisis, but what has developed to become a deep global economic crisis,” said ,” Samuel Tsien, chairman of the Association of Banks in Singapore.
Due to several factors such as ample liquidity, low leverage, and deep capital buffers, MAS Managing Director Ravi Menon said that Singapore’s lenders are well positioned to weather the economic storm caused by COVID-19 as well as having the ability to provide meaningful relief to individuals and SMEs affected by the outbreak.
Companies, including SMEs, holding general insurance policies that protect their business and property risks may apply to their insurer for instalment payment plans.
Banks and finance companies may apply for low-cost funding through a new Singapore-dollars facility for loans granted under Enterprise Singapore.