Demand for loans, moratoriums has slowed since Q2 peak

Applications for new loans and loan moratoriums from both companies and individuals peaked between April to June. PHOTO: ST FILE

More than 18,000 firms have taken out loans amounting to over $14.5 billion under schemes overseen by Enterprise Singapore (ESG) as at Sept 30.

Most of these loans were taken up between March and June, when over 10,600 companies applied for some $9.4 billion in loans under the Temporary Bridging Loan Programme and the SME Working Capital Loan scheme.

In addition, companies made more than 5,400 applications to defer principal payments on secured term loans amounting to more than $11.5 billion as at August, the Monetary Authority of Singapore (MAS) said yesterday.

Applications for new loans and loan moratoriums from both companies and individuals peaked between April and June, and have since slowed.

But those that continue to face financial strain amid the coronavirus pandemic will find much-needed support with the extension of credit relief measures announced by the MAS yesterday, banks said.

The tapering off of new loans and moratoriums sought since July is due to small and medium-sized enterprises (SMEs) seeing improved cash flow following the resumption of business and support from various relief measures implemented to help companies tide over the Covid-19 crisis, said OCBC Bank head of global commercial banking Linus Goh.

"SMEs in several industries which were harder hit, such as the travel-related sector as well as construction, continue to be adversely impacted and will benefit from a further extension of the loan moratorium programme," he added.

Most borrowers with viable business models have been prompt in repaying their loans, a DBS Bank spokesman said.

The bank has approved close to 9,700 loans totalling more than $5 billion to SMEs through the ESG loan schemes, of which more than 8,300 loans were granted to micro and small businesses.

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"We made special effort to reach out to micro and small enterprises, as these are typically the most underserved and vulnerable of businesses in an economic crisis," said DBS Singapore country head Shee Tse Koon.

As for individuals seeking relief, MAS said around 36,000 applications to defer payment on property loans amounting to around $29 billion were approved as at August.

The number of mortgage deferments from individuals has tapered off since the April to June peak - as at end-June, there were nearly 34,000 approved applications, an MAS spokesman said.

United Overseas Bank head of group personal financial services Jacquelyn Tan said: "While there was a spike in calls during the early days of the (debt relief programme), we have seen a drop of more than 50 per cent in new loan deferral applications in the past two months."

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A version of this article appeared in the print edition of The Straits Times on October 06, 2020, with the headline Demand for loans, moratoriums has slowed since Q2 peak. Subscribe