The Monetary Authority of Singapore (MAS) has launched a new lending facility to make certain SMEs have access to capital to mitigate the impact of the COVID-19 pandemic. The MAS SGD Facility for ESG Loans is in partnership with Enterprise Singapore (ESG). The goal is to lend at an interest rate of 0.1% per annum to eligible financial institutions, to support their lending to SMEs under the ESG Loan Schemes. The ESG Loan Schemes comprise the Enhanced Enterprise Financing Scheme – SME Working Capital Loan (EFS-WCL) and the Temporary Bridging Loan Programme (TBLP).
By providing financial institutions funding at a rate of 0.1% per annum, MAS says 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, according to MAS. The Facility complements the enhancements to the ESG Loan Schemes announced on 6 April 2020 as part of the Solidarity Budget, where the Government increased its risk-share of loans to 90%.
MAS has also launched a S$125 million support package to sustain and strengthen capabilities in the financial services and Fintech sectors amid the current economic slump. There is also a new Training Allowance Grant (TAG) designed to encourage financial instutions and Fintech firms to make use of the downtime in business activity, to train and deepen the capabilities of their employees.
A S$ 35 million Digital Acceleration Grant (DAG) to support digitalisation in smaller financial institutions and Fintech firms is available as well.