S'pore extends financing schemes for another year

THE Singapore Government will extend the financing schemes under the Special Risk-Sharing Initiative (SRI) and the enhancements to financing schemes that were introduced at the onset of the global economic downturn.

The Ministry of Trade and Industry and the Ministry of Finance said in a statement that these will be extended under revised terms, which will be valid for a year, taking into account improvements in the global economic situation and the Singapore economy.

The revised SRI will, from next year, be funded from the Government's regular budget, instead of past reserves. The Government expects to support $8.4 billion of new loans until the end of January 2011.

Companies, especially smaller ones, will continue to receive financing support under the revised Bridging Loan Programme.

The loan-quantum limit for companies seeking loans for working capital will be reduced from $5 million to $2 million, with the maximum loan tenure revised from four to two years.

The Government's share of the risk will also be adjusted from 80 to 50 per cent.

The Government will continue to take on 75 per cent of the default risk, and support loans up to $15 million under the Loan Insurance Scheme (LIS) and Loan Insurance Scheme Plus (LIS+) for trade financing.

However, there will be an increase in insurance premiums payable by companies of 30 basis points and 50 basis points for LIS and LIS+ respectively.

Meanwhile, for the Export Coverage Scheme, the Government will continue to subsidise 50 per cent of insurance premiums for eligible companies, up to $100,000 per company.

Additional trade-credit insurance capacity will also be made available through a top-up arrangement.

In line with improvement in the financial situation, the risk shares of the Government and participating financial institutions will also be adjusted.

For the Local Enterprise Finance Scheme, the Government's share of lending risk will be reduced from 80 to 70 per cent.

For the Micro Loan Programme, the Government's share of default risk will be reduced from 90 to 70 per cent.

Both are still above the pre-crisis ratio of 50 per cent.

Meanwhile, the terms of the Internationalisation Finance Scheme will remain unchanged to help companies in terms of overseas asset acquisition and working capital for secured overseas projects.

From Feb 1 next year, the refinancing of existing loans will no longer be covered under all schemes.

 

 

 

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