Minister Lim Hng Kiang’s written reply on the Micro Loan Programme

Question

Mr Yee Jenn Jong: To ask the Minister for Trade and Industry (a) how much loans have been approved over the past three years to companies under the Micro Loan Programme (MLP); (b) what is the average interest rate for the loans; (c) what is the breakdown of the industries that the successful applicant companies come from; and (d) what is the rejection rate for such applications to the banks.

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

1. The Micro Loan Programme (MLP) is a fixed interest rate working capital financing programme for micro-enterprises with no more than 10 employees. The total value of loans approved under MLP in 2010, 2011 and 2012 were S$144.1 million, S$94.6 million and S$120.7 million respectively, with the corresponding median interest rates being 5.5 per cent, 5.5 per cent and 5.75 per cent. The dip in 2011 was due to the retraction of the enhancements to government loan schemes under the Special Risk-Sharing Initiative (SRI) Package. Loan levels have since risen.

2. Of the approved MLP loans between 2010 and 2012, 14% by value went to the construction sector, 12 per cent to the manufacturing sector, 37 per cent to the services sector, and the remaining 37 per cent to the wholesale and retail trade sector. The wholesale and retail trade sector takes up a significant share of MLP due to the sector’s comparatively higher working capital requirements than other sectors.

3. 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.