(Singapore, April 1, 2020) The Monetary Authority of Singapore (MAS), together with four associations, has announced a package of measures to help ease the financial strain on individuals and SMEs caused by the COVID-19 pandemic.

The four associations include the Association of Banks in Singapore (ABS), the Life Insurance Association (LIA), the General Insurance Association (GIA), and the Finance Houses Association of Singapore (FHAS).

The package has three components: help individuals meet their loan and insurance commitments; support SMEs with continued access to bank credit and insurance cover; and ensure interbank funding markets remain liquid and well-functioning.

Mr Ravi Menon, MAS Managing Director said, “It is heartening to see our banks, insurers, and finance companies coming together to support their customers through this difficult time. Our financial institutions are able to do this because of their strong starting position.”

“They have deep capital buffers, ample liquidity, and low leverage. They are well-placed to not only ride out the economic storm caused by COVID-19, but also provide meaningful relief to individuals and SMEs affected by the crisis.”

He said the package of measures they have put together speaks of a financial industry in Singapore that is robust, responsible, and purposeful. These measures will complement the government’s broader fiscal initiatives and help the Singapore economy recover more quickly and emerge stronger when the pandemic passes – as it surely must.

The COVID-19 outbreak is now global, and increasing in intensity. Stringent measures are being adopted around the world to contain the virus, severely curtailing economic activity.

Uncertainty about the trajectory of the pandemic and the depth and duration of an economic recession have also created strains in financial markets globally, which can in turn accentuate the economic crunch.

The Singapore economy contracted sharply in the first quarter of this year, faced with the sudden decline in external demand, disruption in supply chains, and reduced spending at home. MAS says it expects the economy to remain weak beyond the first half of the year.

In the months ahead, many individuals and SMEs in Singapore will continue to face challenges in managing their cash flows and meeting their financial obligations, such as loan repayments and insurance premiums.

MAS and the financial industry have collaborated on a package of measures to help individuals and SMEs facing temporary cashflow difficulties to ride through the storm.

MAS says the relief for individuals and SMEs will be provided on an opt-in basis, as their cashflow circumstances will differ. Deferring payments increases future obligations and hence borrowers and policyholders should weigh their options carefully. Financial institutions will process all applications expeditiously.

Mr Lee Sze Leong, Chairman, Finance Houses Association of Singapore said, “Finance companies are fully supportive of the proactive measures announced by MAS to assist our customers, both individuals and businesses, to alleviate the financial burden as a result of COVID-19. ”