The bank will pass all cost savings to SMEs by lowering the interest rate.
OCBC Singapore is expected to disburse $698m (S$1b) in government-assisted SME loans by 30 June under the Monetary Authority of Singapore’s low-cost SGD Facility.
The loan amount projected for the three months from April to June will exceed the total government-assisted loans disbursed to the same customer segment during the 2008-2009 global financial crisis. Almost 1,000 SMEs have asked for deferment of principal payments on unsecured and secured loans, OCBC said.
The bank will pass all cost savings to SMEs by lowering the interest rate of the Temporary Bridging Loan from 3% to 2%. Further savings will be derived from the waiver of loan processing fees.
There has been a more than ten-fold surge in applications for the relief measures as the financial strain from the Circuit Breaker exacerbated an already challenging environment, the bank said, with manufacturing, construction, trading and distribution, and service firms looking for more support.
OCBC has also seen a similar spike in requests for funding from larger SMEs with turnover above $174m (S$250m).