Numbers of Borrowers who Applied for Relief from Loan Obligations due to COVID-19 Disruptions and Borrowers with Problems Transitioning Back to Full Loan Repayment
Prime Minister's OfficeSpeakers
Summary
This question concerns Ms Foo Mee Har’s inquiry regarding the number of borrowers applying for COVID-19 relief packages and those facing difficulties returning to full loan repayments. Senior Minister Tharman Shanmugaratnam stated that from April to December 2020, banks deferred over 36,000 property loans, converted 10,300 unsecured facilities, and approved 6,500 SME secured loan principal deferments. To assist the transition back to full repayment, extended relief options such as partial repayments and lower instalments were offered to those with continued cashflow challenges. As of late 2020, only a small proportion of borrowers sought these extensions, with approximately 2,800 property loan instalment plans and 1,000 SME principal deferments approved. Senior Minister Tharman Shanmugaratnam concluded that while sectors like aviation remain challenged, the recovering economy is expected to result in fewer cases of financial hardship.
Transcript
23 Ms Foo Mee Har asked the Prime Minister (a) what is the number of borrowers who applied for relief packages offered by financial institutions to overcome financial difficulties due to the COVID-19 pandemic; and (b) what is the number of borrowers expected to have problems transitioning back to full loan repayment.
Mr Tharman Shanmugaratnam (for the Prime Minister): Between April and December 2020, banks and finance companies deferred loan repayment on more than 36,000 property loans and 2,800 renovation and student loans, converted more than 10,300 revolving unsecured credit facilities to lower-interest term loans, and approved more than 6,500 principal payment deferments for SME secured loans.
Upon the expiry of these relief measures at the end of last year, extended reliefs have been made available to individuals and SMEs facing continued cashflow challenges. Borrowers can apply for partial repayment or lower monthly instalments, which give them more time to transition to full loan repayments eventually. Longer-term loan restructuring options are also available for borrowers in greater financial difficulties.
So far, only a small proportion who took up reliefs in 2020 have sought the extended reliefs. As at end 2020, banks and finance companies have approved about 2,800 reduced instalment plans for property loans, 150 loan tenure extensions for renovation and student loans, and 1,000 deferments of principal payments by SMEs on secured and government-supported loans.
The Monetary Authority of Singapore and the financial industry will continue to monitor the situation closely. Fortunately, all indications are that other than a few hard-hit sectors such as aviation, the economy is generally recovering, and we should see fewer cases of financial hardship.