SINGAPORE - Small and medium-sized enterprises (SMEs) and individuals still facing financial difficulties due to the pandemic will get more time before they have to restart full loan repayments.
Support measures for borrowers were due to end on June 30 but have been extended to Sept 30, it was announced on Thursday (June 24).
The measures introduced last year "have helped borrowers affected by Covid-19 restrictions. This final extension will provide support for remaining borrowers still affected", said Mr Ravi Menon, the managing director of Monetary Authority of Singapore (MAS).
The initiative - known as the Extended Support Scheme (ESS) - was set up to help individuals and SMEs with cash-flow difficulties move gradually to resuming full loan repayments.
It applies to what have been labelled Tier 1 and 2 sectors. These comprise aviation and aerospace, tourism, hospitality, conventions and exhibitions, built environment, licensed food shops and food stalls (including hawker stalls), qualifying retail outlets, arts and entertainment, land transport and marine and offshore.
SMEs intending to restructure their credit facilities across multiple financial institutions can now apply for the Extended Support Scheme - Customised (ESS-C) up until Dec 31.
The gradual opening up of economic activity has allowed most borrowers to resume loan repayments, but some individuals and businesses still face cash-flow difficulties as Covid-19 restrictions have impacted borrowers unevenly, said the MAS yesterday.
It also advised borrowers who are unlikely to be able to resume full loan repayments by the end of the relief periods to approach their lenders early to work out longer term repayment solutions.
After the industry wide support measures expire, lenders will continue to offer relief and restructuring options for borrowers based on their specific circumstances, the MAS added, noting that those who can resume full loan repayments should do so to avoid unnecessary debt accumulation.
Mr Menon said: "With continued economic recovery... 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."