Channel NewsAsia
Updated: 02/21/2014 20:12 | By Channel NewsAsia

Budget 2014: Govt to enhance Micro Loan Programme for SMEs

Budget 2014: Govt to enhance Micro Loan Programme for SMEs


Budget 2014: Govt to enhance Micro Loan Programme for SMEs

SINGAPORE: The government has announced that it will enhance the Micro Loan Programme (MLP).

Young small and medium enterprises (SMEs) often find it difficult to obtain loans to grow their businesses.

They lack a track record and are seen to be more risky investments, making it difficult for them to get loans from banks.

The MLP was launched in 2001 to encourage banks to provide loans to these young businesses.

Under the scheme, the government takes on some of the risk for small loans below S$100,000.

In Budget 2014, the government announced that it will take on more risk from 50 per cent to 70 per cent to spur lending to the young SMEs.

To qualify, the SMEs must not have more than 10 employees, or have annual sales not exceeding S$1 million.

The government has also announced that it is studying the potential of equity crowdfunding.

Crowdfunding has been emerging in some countries as an alternative source of financing for start-ups and small companies.

Deputy Prime Minister Tharman Shanmugaratnam said that MAS and SPRING Singapore are looking into an appropriate regulatory framework for such new business models. 

- CNA/xq

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