Financial institutions launch SME debt restructuring programme

SMEs may apply for the support scheme until June 2021.

The Association of Banks in Singapore (ABS), with support from the Finance Houses Association of Singapore, has launched the Extended Support Scheme – Customised (ESS-C), an industry programme that aims to help small and medium sized enterprises (SMEs) restructure their credit facilities across multiple banks and finance companies.

Eligible credit facilities include loans under Enterprise Singapore’s Temporary Bridging Loan Programme and Enhanced Working Capital Loan Scheme, according to a press release.

The ESS-C is intended for SMEs with loans with more than one lender and for whom the Ministry of Law's (MinLaw) Simplified Insolvency Programme and CCS’ SPP Scheme are not suitable.

SMEs will be able to apply for the ESS-C from 2 November 2020 to 30 June 2021.

The support scheme was led by UOB, together with the other major banks, and the Monetary Authority of Singapore (MAS). Other financial institutions partaking in the scheme include DBS, OCBC, HSBC, Bank of China, CIMB Bank, Citibank N.A. and Citibank Singapore, DBS, HL Bank, Hong Leong Finance, Indian Overseasd Bank, Industrial and Commercial Bank of China (ICBC), Malayan Banking Berhad and Maybank Singapore, RHB Bank, Standard Chartered (Singapore), Sing Investments & Finance, and Singapura Finance.

SMEs make up 99% of all businesses in Singapore and employ 65% of workers in the city, making it vital to help the sector weather the crisis, noted to ABS director Ong-Ang Ai Boon,

“The intent is to facilitate a more holistic restructuring of an SME’s loans compared to if the SME had to approach its lenders individually,” she added.

The ESS-C is part of the package of extended relief measures announced by MAS, the ABS, and the Finance Houses Association of Singapore on 5 October to assist borrowers facing cashflow challenges due to the COVID-19 pandemic, the press release said.

It complements other customised restructuring assistance schemes under the MinLaw’s Simplified Insolvency Programme for micro and small companies and Credit Counselling Singapore (CCS)’s scheme for sole proprietors and partnerships (SPP Scheme).