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Coffeeshop Chit Chat - Govt wont lend directly to companies...</TD><TD id=msgunetc noWrap align=right>
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</NOBR> </TD><TD class=msgDate noWrap align=right width="30%">7:14 am </TD></TR><TR class=msghead><TD class=msgT noWrap align=right width="1%" height=20>To: </TD><TD class=msgTname noWrap width="68%">ALL <NOBR></NOBR></TD><TD class=msgNum noWrap align=right> (1 of 2) </TD></TR></TBODY></TABLE></TD></TR><TR><TD class=msgleft width="1%" rowSpan=4> </TD><TD class=wintiny noWrap align=right>5537.1 </TD></TR><TR><TD height=8></TD></TR><TR><TD class=msgtxt>Government will not lend directly to companies amid credit squeeze
By Wong Siew Ying, Channel NewsAsia | Posted: 19 January 2009 1921 hrs
SINGAPORE : The Singapore government has said the response to its S$2.3 billion loan support package for companies has been "positive".
But Trade and Industry Minister Lim Hng Kiang, speaking in Parliament on Monday, said the government is not in the position to lend directly to firms amid the current credit crunch.
Over 100,000 local companies stand to benefit from the government's enhanced financial package implemented last month.
But some businesses still face difficulties in accessing loans as banks become more cautious. This prompted Jalan Besar MP Dr Lily Neo to ask if the government could provide direct loans to them.
In response, Mr Lim said: "Building up a relationship with the borrower takes a lot of time, a lot of effort and a good understanding of the businesses, and therefore it is not something that we can do overnight.
"Obviously, SPRING or IE Singapore is not geared up to do this. That is why over the years, we have always worked through the banks."
Mr Lim added that government loans play a targeted role and are not intended to replace commercial lending.
He said: "Our preferred approach is to share a significant portion of the financial institutions' risks, up to 80 per cent, and defray some of their administrative costs."
Apart from risk sharing, other measures which have been implemented include increased amount of loan and lower interest rates.
Mr Lim said it is too early to gauge the effectiveness of the enhanced loan schemes, since they were only introduced in December. But early indications and feedback have been positive.
Banks have seen loans applications go up in December 2008 to about 500 cases. Many of them are still being processed, but Mr Lim said approved loans increased by 30 per cent on-year to S$80 million in December.
[email protected]
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By Wong Siew Ying, Channel NewsAsia | Posted: 19 January 2009 1921 hrs
SINGAPORE : The Singapore government has said the response to its S$2.3 billion loan support package for companies has been "positive".
But Trade and Industry Minister Lim Hng Kiang, speaking in Parliament on Monday, said the government is not in the position to lend directly to firms amid the current credit crunch.
Over 100,000 local companies stand to benefit from the government's enhanced financial package implemented last month.
But some businesses still face difficulties in accessing loans as banks become more cautious. This prompted Jalan Besar MP Dr Lily Neo to ask if the government could provide direct loans to them.
In response, Mr Lim said: "Building up a relationship with the borrower takes a lot of time, a lot of effort and a good understanding of the businesses, and therefore it is not something that we can do overnight.
"Obviously, SPRING or IE Singapore is not geared up to do this. That is why over the years, we have always worked through the banks."
Mr Lim added that government loans play a targeted role and are not intended to replace commercial lending.
He said: "Our preferred approach is to share a significant portion of the financial institutions' risks, up to 80 per cent, and defray some of their administrative costs."
Apart from risk sharing, other measures which have been implemented include increased amount of loan and lower interest rates.
Mr Lim said it is too early to gauge the effectiveness of the enhanced loan schemes, since they were only introduced in December. But early indications and feedback have been positive.
Banks have seen loans applications go up in December 2008 to about 500 cases. Many of them are still being processed, but Mr Lim said approved loans increased by 30 per cent on-year to S$80 million in December.
[email protected]
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