Singapore’s Central Bank Creates the MAS SGD Facility
Posted on 04/20/2020
The Monetary Authority of Singapore (MAS) created the MAS SGD Facility for Enterprise Singapore loans in partnership with Enterprise Singapore, to lend Singapore Dollars at an interest rate of 0.1% per annum to eligible financial institutions, to support their lending to SMEs under the Enterprise Singapore Loan Schemes. The Enterprise Singapore Loan Schemes comprise the Enhanced Enterprise Financing Scheme – SME Working Capital Loan (EFS-WCL) and the Temporary Bridging Loan Programme (TBLP). Formed on April 1, 2018, Enterprise Singapore is a statutory board under the Ministry of Trade and Industry in Singapore.
The Singaporean government is sharing 90% of the risk on such loans and MAS providing funding at almost zero cost under the Facility, banks and finance companies will be able to make more loans to SMEs and at lower cost.
MAS hopes the facility will help Singaporean banks originate loans to small-to-medium enterprise borrowers more affordable. MAS press release, “By providing financial institutions funding at the low interest rate of 0.1% per annum, for a two-year tenor, the Facility reduces the financial institutions’ cost of funds for loans made under the ESG Loan Schemes. This will help SMEs manage their cash flow better amidst the current COVID-19 pandemic.”
Singapore’s Temporary Bridging Loan Programme is intended to help local enterprises manage their immediate cash flow needs. SMEs that need working capital beyond the bridge loan program can apply for the SME Working Capital Loan program. The TBLP started in March 2020 and is available until March 31, 2021.