Lim Hng Kiang’s written reply on the Internationalisation Finance Scheme (IFS) and Loan Insurance Scheme

​

Question

Mr Yee Jenn Jong: To ask the Minister for Trade and Industry in the past three years (a) how much loans have been approved under the Internationalisation Finance Scheme and Loan Insurance Scheme (LIS and LIS+) respectively; (b) what is the average revenue turnover of the successful applicant companies; (c) what is the breakdown of the industries that the successful applicant companies come from; and (d) what is the rejection rate of such applications to the financial institutions.

Written Reply by Mr Lim Hng Kiang, Minister for Trade and Industry

1. The Internationalisation Finance Scheme (IFS) assists Singapore-based companies to expand overseas, by supporting companies to acquire fixed assets for use overseas or finance the working capital expenses of their overseas projects. The total value of loans approved under IFS in 2010, 2011 and 2012 were S$378 million, S$195 million and S$121 million respectively, and the average annual turnover of successful applicant companies is around S$40 million. The decline in approved IFS loan quantum over this period was due to the scaling back in 2010 and withdrawal in 2011 of enhancements made to IFS as part of the Special Risk-Sharing Initiative (SRI) in 2009. The 2012 levels, therefore, are more representative of the steady-state runrate for our schemes.

2. ​Of the approved IFS loans, 41 per cent by value went to the infrastructure services sector, 26 per cent to the electronics and precision engineering sector, 12 per cent to the lifestyle services sector, 7 per cent to the information communications technology sector, 6 per cent each to the commodities and environmental services sectors, 2 per cent to the transport and logistics sector, and the remaining 1 per cent to the business services sector.

3. ​The Loan Insurance Scheme (LIS and LIS+) enables SMEs and Singapore-based internationalising companies to have better access to working capital financing and trade financing, by supporting insurance against default. The total value of loans approved under LIS and LIS+ in 2010, 2011 and 2012 were S$2.3 billion, S$1.6 billion and S$1.3 billion respectively, and the average annual turnover of successful applicant companies is around S$15 million. As with IFS, the decline in approved LIS loan quantum over this period was a result of the scaling back and withdrawal of the SRI enhancements in 2010 and 2011 respectively.

4. Of the approved LIS and LIS+ loans, 14 per cent by value went to the construction sector, 13% went to the manufacturing sector, 11 per cent to the services sector and the remaining 62 per cent to the wholesale and retail trade sector.

5. Interested applicants will first consult their relationship managers (RMs) at the participating financial institutions (PFIs), whereupon the RM will conduct a preliminary screening, before advising the interested applicant whether or not to submit an application. The RMs do not maintain a record of the number of cases where they have advised potential applicants against submitting an application.