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DBS provides liquidity support to over 3,500 micro and small enterprises

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Author: Ravi Philemon

DBS provides liquidity support to over 3,500 micro and small enterprises, entrenching support for oft-underserved segment

  • Micro and small enterprises account for eight in ten of all government-assisted SME loans approved by DBS
  • DBS provides industry first contact-free and fully digital loan application and acceptance process for safer and faster access to working capital

DBS provides over SGD 1.1 billion for them under Enterprise Singapore’s financing schemes

Reinforcing its support for micro and small enterprise customers, usually the most underserved and vulnerable of businesses, during this challenging Covid-19 period, DBS has approved over 3,500 loans totalling over SGD 1.1 billion for them under Enterprise Singapore’s financing schemes. This accounts for eight in ten of all Government-assisted SME loans that the bank has approved between the start of March 2020 and mid-May 2020.

Of the more than 3,500 loans approved for micro and small enterprises, around three in ten loans were for customers with no prior relationship with the bank, while over half were for customers with no prior borrowing history with DBS.

Among those with no borrowing history with DBS, the average loan quantum was SGD 250,000, with two out of three borrowing SGD 200,000 and below, of which over 800 borrowed SGD 100,000 and below. Borrowers came mainly from the services (27 per cent), building and construction (13 per cent), general wholesale (12 per cent), food and beverages (11 per cent), and retail (9 per cent) sectors.

DBS provides financial solutions to meet working capital needs

Joyce Tee, Group Head of SME Banking at DBS, noted that micro and small enterprises may not be familiar with the financing solutions available to meet their working capital needs, as they have typically flown under the radar of lenders. “While we are committed to supporting all viable SMEs through these difficult times, we are doubling down on our support for micro and small enterprises. Many have sound business models but are facing a cash crunch with business momentum slowing significantly due to the extended safe distancing and circuit breaker measures. Meantime, overheads and contractual expenses still have to be met. We are engaging our micro and small businesses closely to ensure that they have the working capital support they need to meet these challenges.”

The Federation of Merchants’ Associations, Singapore (FMAS) is one key stakeholder that DBS is working with to ensure that working capital support reaches the most challenged micro and small businesses. DBS and FMAS have been collaborating on solutions to ease the cash flow challenges faced by heartland enterprises since early April.

dbs provides

DBS provides liquidity support to over 3,500 micro and small enterprises, entrenching support for oft-underserved segment (Image credit: DBS)

There are over 15,000 heartland enterprises across 14 town centres in Singapore, spanning a diverse range of businesses, from kopitiam owners to service providers and neighbourhood mom and pop shops.

Yeo Hiang Meng, President of the FMAS, said, “When our stakeholders came to us for help amidst the mighty economic storm, DBS was our most natural port of call. DBS was the first bank in Singapore to work with us on availing Government-assisted SME loans to our heartland businesses, and many of our SMEs have benefitted from their timely support. In fact, DBS has a long history of supporting our heartland enterprises even before Covid-19 situation began unfolding, and we’re thankful that they have chosen to stand resolutely with us during these difficult times.”

Tee added that heartland businesses are an integral part of Singapore’s community as they bring vibrancy to the heartlands and provide a variety of goods and services to Singaporeans from all walks of life. “It would be a shame for promising businesses to fold as a result of conditions they have no control over. We are fighting not only for the survival of these businesses, but for the very spirit of entrepreneurship that forms the bedrock of Singapore’s economy.”

DBS has kept its lending rates low for its SME Working Capital Loan and the Temporary Bridging Loan Programme by tapping the Monetary Authority of Singapore’s SGD Facility for Enterprise Singapore Loans. In doing so, DBS accesses low-cost funding and passes on all cost savings to its SME customers. The bank has also gone one step further by being the first in the industry to waive all processing fees since February, thus removing another cost component. As a result, DBS is able to extend loans from the Enterprise Singapore financing schemes at interest rates averaging 2 to 3 per cent, which are among historic lows for the industry.

DBS provides SMEs with fast access to working capital in five working days

DBS is committed to ensuring that all viable businesses with liquidity challenges receive working capital financing support in a timely manner. Customers with complete loan applications and full documentation submitted together with their loan application forms can expect to receive working capital monies within five working days of acceptance.

Since March 2020, DBS has seen a surge in the number SME loan applications, and in SMEs’ rush to get access to liquidity, the bank has also seen a surge in incomplete loan applications with little or incorrect supporting documentation. Customers who wish to access working capital fast should:

  • Ensure that their loan application forms and supporting documentation are complete at the point of submission
  • Ensure that information provided in the forms and documents are accurate and in accordance with the relevant time period requested on the application form
  • Get back to the bank in a timely manner when asked for any missing documents during the loan approval process

DBS has also specially tailored its Digital Business Loan to the needs of micro and small businesses, disbursing up to SGD 200,000 in working capital as quickly as the day after approval. To relieve micro and small enterprises of the onerous task of producing audited financial statements, DBS has further simplified the credit documentation process for this loan with no financials required for applications. Instead, customers need only provide their most recent bank statement or Notice of Assessment for their application to be processed.

DBS provide digital loan application and acceptance to keep SME customers safe with contact-free

In an industry first, physical loan application and acceptance procedures, such as filling up physical forms and obtaining wet signatures, have been replaced with remote and digital procedures. With the loan application and acceptance process digitised and made contact-free, customers are now able to receive the financing support they need from the safety of their home offices. Since March 2020, about six in 10 of all SME loan applications have been made through digital channels.

The bank has also rolled out complimentary webinars and online courses to further ease SMEs into the world of digital banking. To date, over 1,000 clients have been trained on how they can transact, trade and manage their banking needs from the comfort of their home offices.

DBS is also equipping all SMEs with a complimentary Covid-19 SME Business Resource Guide to give business owners the insights needed to navigate their businesses through the current economic uncertainty. The guide contains fresh perspectives from industry leaders on how the operating landscape is likely to change as a result of Covid-19, and actionable tips for SMEs to position themselves for recovery and growth as economies in the region look towards a gradual restart.

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Responsible AI adoption in financial services – ‘fairness metrics’ introduced

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Author: Ravi Philemon

“Fairness Metrics” to Aid Responsible AI Adoption in Financial Services

The Monetary Authority of Singapore (MAS) announced today that the first phase of the Veritas initiative – a framework for financial institutions to promote the responsible adoption of Artificial Intelligence and Data Analytics (AIDA) – will commence with the development of fairness metrics in credit risk scoring and customer marketing. These metrics will help financial institutions validate the fairness of their AIDA solutions in the two use cases.

responsible AI adoption

More use cases will be identified in subsequent phases of this initiative to promote responsible AI adoption in financial services

MAS co-created ‘fairness metrics’ to strengthen internal governance around responsible AI adoption in financial services

In Nov 2019, MAS announced that it is working with financial industry partners to create a framework for financial institutions to promote the responsible adoption of Artificial Intelligence and Data Analytics (AIDA). This framework, known as Veritas, will enable financial institutions to evaluate their AIDA-driven solutions against the principles of fairness, ethics, accountability and transparency (FEAT) that MAS co-created with the financial industry last year to strengthen internal governance around the application of AI and the management and use of data. Proper governance around the use of AIDA is critical to fostering trust and confidence in AIDA-driven decisions and financial services.

The Veritas framework was highlighted by Mr Heng Swee Keat, Deputy Prime Minister of Singapore, in his speech laying out Singapore’s National AI Strategy at the Singapore FinTech Festival and Singapore Week of Innovation and TeCHnology (SFF x SWITCH) 2019.

Veritas aims to provide financial institutions with a verifiable way to incorporate the FEAT principles into their AIDA solutions. It will comprise open source tools that can be applied to different business lines, such as retail banking and corporate finance, and in different markets. For a start, Veritas will focus on use cases in three areas: customer marketing, risk scoring, and fraud detection. The FEAT principles and Veritas are part of Singapore’s National AI Strategy, and help to build a progressive and trusted environment for AI adoption within the financial sector.

The Veritas consortium is currently made up of 17 members, comprising MAS, SGInnovate, EY and 14 financial institutions. The consortium will produce a report on its findings and conclusions in the second half of 2020. MAS welcomes other interested organisations to participate in the consortium.

More use cases will be identified in subsequent phases of this initiative to promote responsible AI adoption in financial services.

Credit risk scoring to assess the credit worthiness of borrowers is a critical function of the financial services industry and impacts most customers of financial institutions. Given the large amount of customer data to analyse, financial institutions are increasingly employing AI tools for this purpose. It is crucial that AI-driven decisions do not systematically disadvantage any particular individuals or groups when determining the credit risk scoring.

Customer marketing is another area with significant potential for AI adoption. As marketing processes become increasingly digitalised and automated, there is increasing scope to use AI tools to analyse customer data and match products or services to customers. Hence, it is important that such AI solutions recommend the right product to the right customer at the right time.

Two core teams within the Veritas consortium will be taking on the development of the fairness metrics:

  • UOB and Element AI will develop the metrics on credit risk scoring
  • HSBC, IAG Firemark Labs and Gradient Institute will develop the metrics on customer marketing.

The consortium will publish a white paper documenting the metrics and release an open-source code to enable financial institutions to adopt the fairness metrics for responsible AI adoption in these two areas by the end of this year.

Financial institutions can integrate the open-source code into their own IT environment to validate the fairness of their AI solutions. The open-source code will also be deployed as a service on the APIX platform. APIX is a global, open-architecture platform that supports financial innovation and inclusion in ASEAN and around the world. This will allow financial institutions and FinTechs to have access to the service and technology providers on the platform who are able to validate their AI solutions.

Since the announcement of the project to create framework for responsible AI adoption in financial services in November 2019, 8 new members have joined the Veritas consortium. This brings the current membership to 25 members.

Mr Sopnendu Mohanty, Chief FinTech Officer, MAS, said, “The responsible use of AI is a prerequisite for the greater adoption of AI in the financial sector. Veritas is the first industry-wide collaboration to provide a mathematical way to validate AIDA solutions against the principles of Fairness, Ethics, Accountability and Transparency. We hope Veritas will speed up the adoption of AI in financial services in the right direction.”

Mr Paul Ho, chief mortgage officer at iCompareLoan, said, “technology is fast disrupting the financial sector and AI adoption is quickening in pace. The covid-19 crisis will only accelerate the disruption and adoption. In such a climate ‘fair metrics’ is especially useful to promote responsible AI adoption.”

He added, “as most financial institution services have moved online, we too have started meeting our clients remotely. In this extended Circuit Breaker period, people are still buying and selling properties, and they can get the best home loans only when they work with trusted mortgage brokers.”

On 21 April 2020, the Multi-Ministry Taskforce announced that it would extend the circuit breaker period until 1 Jun 2020 (inclusive), and put in place enhanced circuit breaker measures minimally for a two-week period from 21 April 2020 until 4 May 2020 (inclusive).

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Debt crisis – 10 tips to help you weather a financial storm

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Author: Ravi Philemon

If you are in a debt crisis which is threatening to sink your ship, the following tips may help you maintain stability and weather the storm successfully.

By: Nithila Vijayan

1. Examine the Reasons Behind Your Debt Crisis. Solving financial problems requires that you understand the underlying cause of the crisis. Examine the reasons objectively. If you have health issues, loss of employment, or have sustained damages from a natural disaster, there are agencies that can help you. Do some research and don’t be afraid or embarrassed to ask for help. If your money problems are a result of poor management or overspending, don’t berate yourself. Maintaining your self-esteem and a positive attitude will enable you to make good rational decisions so you can work your way out of debt.

2. Analyse and Categorise Your Debts. Debts fall into two categories, secured and unsecured. Secured liabilities are guaranteed by property, either real or personal. A mortgage is a secured debt. An motorcar loan is a secured debt. Credit card balances are the most common example of unsecured debt. List all your debts and determine which category each of your debts falls under.

3. Prioritize your payments. When you are in a financial crisis, the payment order for your bills should be determined by their importance in sustaining and maintaining your life. Keep in mind that, if you don’t make the payments on a secured debt, the creditor can ultimately take control of the property used for collateral on the loan.

debt crisis

Image credit: Alan Cleaver l Flickr

4. Cut Expenses. If you are in a debt crisis, look for ways to reduce the amount you pay out each month.

Trimming the fat from your budget requires diligence and sacrifice. Pack a lunch, use grocery store vouchers, and search out free entertainment. Learning to save and live more frugally can be a giant step towards financial stability.

5. Increase Income to overcome a debt crisis. There are a number of ways to increase income. A second job may provide the extra funds needed to improve your financial status. However, take into consideration the expenses that may be associated with working longer hours, such as childcare and transportation. Selling personal property is another option that may help you overcome a financial crisis. Just be sure to get the fair market value of the property and don’t part with items that will cause you emotional distress.

6. Communicate With Your Creditors, But Don’t be Intimidated. Ignoring phone calls and email from your creditors may only make matters worse. You need to know what actions your creditors are planning to take against you, so you can take appropriate measures to protect yourself from lawsuits or the loss of an asset. Keeping the lines of communication open makes negotiations and settlements possible.

7. Develop Good Bookkeeping Procedures. Keep your cash accounts balanced and in good order. When finances are being stretched, it is imperative that you know exactly how much cash you have to work with. The secret behind good accounting practices is organisation. If you don’t have a filing system for your bills and cash statements, set one up. Discrepancies in your cash accounts should be checked and verified with your bank as soon as possible. Never write a post-dated cheque. Never write any cheque without making sure your account contains enough funds to cover it. The fees and penalties banks charge for returned cheques are high and will only worsen your financial situation.

8. Consolidate with Care. If you are a private homeowner, you may be able to qualify for an equity loan to consolidate your bills into one easier-to-manage payment. Remember that a home equity loan means that you are tapping into the cash value of your house. There are many different types of home equity loans, but before you sign on the dotted line, check out the lenders and make sure the one you work with is reputable. A consolidation loan can be a permanent solution to your money woes, but you must have the discipline to cut up your credit cards and change your spending habits.

9. Credit Counselling when you are in a debt crisis. A reputable credit-counseling service, such as Credit Counselling Singapore, can be a viable solution for long-term financial problems. In addition to providing valuable financial education, they also offer workable debt management plans. This is not a quick fix. However, it is one of the most sensible ways to get out of debt and stay out of debt.

10. Bankruptcy. This option should be viewed as a “last resort” when you are in a debt crisis. You need competent legal advice and guidance before, during, and after a bankruptcy filing.

Thousands of people are searching online for unsecured personal loans at any given time. Some of those doing personal loan search will find loans that charge very high interest rates or fees. Some will get great deals on personal loans with minimal hassle. It’s better to be part of this second group.

Personal loans are a way to use tomorrow’s income today, and unlike other loan products like mortgage loans or education loans, the process involved to apply for best personal loan is relatively simple.

But you must note that the interest rates are much higher than, say, for a car loan. This is because personal loans are unsecured loans, which means that the personal loan is not backed by any asset. But personal loans can be easily used for debt consolidation.

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Personal loan search done diligently should get you best fit product

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Author: Ravi Philemon

Personal loan search should be done in a diligent way, and be mindful that applications made in an incomplete manner, will find it very difficult to secure loan.

By: Hitesh Khan/

personal loan searchThousands of people are searching online for unsecured personal loans at any given time. Some of those doing personal loan search will find loans that charge very high interest rates or fees. Some will get great deals on personal loans with minimal hassle. It’s better to be part of this second group.

For personal loan search, here are three ways to stay on the affordable side of personal loans:

1. Good Credit Score

Borrowers with a good credit score are at a great advantage in obtaining affordable personal loans. Borrowers with over good credit who need a personal loan for a good reason are a no-brainer for a wide range of lenders, from traditional banks to finance co-operatives and other non-bank lenders like licensed moneylenders. Unsecured personal loans repayments are often done through a personal bank account; if ten other lenders have claims to that bank account, an affordable unsecured personal loan is not happening.

2. Steady Job

The other main way to get an affordable personal loan is to hold down a steady job. Also, to be able to verify that this job has been steady over some time. If a borrower can look at bank statements and see that salary going in every month, approving a personal loan makes a lot of sense.

3. Easy File

Those doing personal loan search should not just throw out numbers on the application and hope for the best. Instead, be prepared and use accurate information.

Lenders are able to process “easy file” loan applications much faster and more satisfactorily than applications with missing information, incorrect bank account information, or unavailable contact numbers. Applying for an unsecured personal loan can be done the easy way, or it can be done the incomplete way, which then turns into the hard way.

When doing personal loan search be mindful that an affordable unsecured loan is often made available to highly qualified borrowers. Bad credit personal loans are available, too. But the best rates on personal loans are reserved for borrowers with good credit, verifiable income, and organised application information. Low APR, with fixed repayment schedules, with no collateral posted, are readily available to qualified borrowers, even in this still-restricted credit environment.

Sometimes personal loan applications get rejected because of poor credit score due to misreported bank finance charge. Given that your poor credit score might be caused due to something accidental and unexpected, like misreported bank finance charge, your first logical step should be to review your credit report and fix whatever is possible as this can really help in broadening your options for personal loans in the future. There are agencies which can help in repairing your credit score quite successfully and you should consider these as your first option when thinking of a personal loan with having bad credit.

Even with poor credit score, if you have held the same job for a number of years, for instance, you’re more likely to obtain the loan. However, if you’ve changed jobs several times over the past few years, you may be less likely to get the loan you want.

The application process for a personal loan from a licensed moneylender is usually relatively quick. Another advantage is that it does not require a formal closing. The application process consists of a written application, a promissory note, and a payment schedule. As a result, there is less paperwork and hassle involved in obtaining a personal loan than in obtaining a secured loan.

Personal loans can be a godsend when you face a huge medical bill, an unexpected repair bill, or another large expense. But you might be wondering if a personal loan is even possible if you have had the misfortune of having bad credit.

When personal loan shopping, take time to evaluate different lenders and loan packages. This will help you make the best decision about borrowing money. If several lenders refuse to loan you money or offer very high interest rates, you may need to put off borrowing money until you clean up your credit.

When you carefully analyse and do personal loan search, you will realise that to choose personal loan may be the most sensible option when you want to borrow a fixed amount over a short period of time.

Personal loans are a way to use tomorrow’s income today, and unlike other loan products like mortgage loans or education loans, the process involved to apply for best personal loan is relatively simple.

But you must note that the interest rates are much higher than, say, for a car loan. This is because personal loans are unsecured loans, which means that the personal loan is not backed by any asset. The loan amount and interest rate depend on different parameters such as your income, credit history, repayment capacity, and others.

As even the best personal loan comes with high interest rates, so defaulting loan payments will put you on a quick downward spiral. Personal loans are basically unsecured loans which typically from $1,000 – $100,000 with fixed or variable interest rates that can be used to make a large purchase or to consolidate debt. Borrowers can use personal loans for credit card debt consolidation, business expansions, home improvements, medical bills and other major life expenses.

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Property valuation factors that add worth to your home only a handful

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Author: Ravi Philemon

What property valuation factors add worth to your home especially in this Covid-19 crisis? This question has become an increasingly common topic of conversation in recent months. But what property valuation factors decides how much your home is worth?

By: Hitesh Khan/

property valuation factors

Image credit: Grant McLean/Flickr

There are a number of property valuation factors which determine your homes worth, some are logical, based on economic theories and population density and some are based on more intangible factors, like the feel of a neighbourhood and expectations for future growth.

We have outlined some of the key property valuation factors which effect your homes worth and how they are determined.

1. Supply and demand
Put simply if demand for houses increases faster than supply, then house prices go up. For house prices to fall the demand needs to fall.

2. Interest rates
When interest rates rise, mortgage lenders generally increase the cost of variable mortgage payments. These higher interest rates in turn make home buying less attractive. Since the majority of homeowners in Singapore have variable mortgages, even a small change in interest rates can have a big impact on the affordability of buying a house.

3. Economic growth
As the economy grows and wages increase more people can afford buy a house, this in turn increases overall demand, which increases prices. See number 1.

4. Demographics
As levels of migration increase so does the population and more people means more demand for homes. Another factor is changes in demographics; for example rising divorce rates have increased the number of single people living alone and our old friend demand is an issue again.

5. Location, location, location
This is an obvious one. Homes that are closer to the MRT, closer to the CBD or closer to good schools tend to add to the property valuation factors. If you look at any map of Singapore, you will see a high concentration of housing around the city centre. The majority of people want to live close to where they work, shop and go out to enjoy themselves and this naturally causes higher demand for property prices in these areas.

6. Parking
We all know that parking is at a premium in our big cities so if a home has designated parking space, this can significantly increase the value of a home.

9. Home improvements
Updating kitchens, replacing flooring, repainting walls and adding landscaping can add to the Singapore property values. However often homeowners spend too much and don’t get the return on investment when they sell the house. Before making drastic improvements to your house, be sure to talk with your real estate agent so that you use your money wisely on your investment.

Have you ever noticed everyone gravitates toward the kitchen during a party? It’s known as the heart of the home for a good reason. The draw of your kitchen to party-goers has the same value to potential buyers, so a kitchen remodel is one of the best ways to add value to your house. An updated kitchen appeals to a buyer’s emotions and a homeowner’s wallet because, if done correctly, it can give you close to a 100 per cent return on your investment on home improvements.

Updating your bathrooms, especially master baths, will add considerable value to your house. A master suite with his and her sinks, spacious showers and plenty of square footage are what buyers are looking for. Added amenities such steam showers and whirlpool tubs will serve you well, and ample storage is a must.

Traditional ceramic tile floors are preferred over wood flooring because they handle water better. If you want to go green, low-flow toilets and skylights are good choices. Keep your design in the same period as the rest of your house. You can still have modern amenities while retaining a classic look. Don’t be shy when it comes to spending – the average bathroom remodel can get you back the majority of your investment.

Do you know enough about how property valuation is done in Singapore?

Knowing how to calculate the property valuation is of paramount importance to a home owner. It can help you determine whether you are overpaying for a home, or whether you have gotten yourself a real bargain. Paying the right price is just one way you can avoid overspending on your property.

Another smart way to avoid overspending on your property is to get the right loan. Getting the right loan can be a much simpler task, but only if you get the right person to it for you. Get in touch with iCompareLoan’s loan consultant to help you get the best loan deal at the right price.

The iCompareLoan mortgage brokers can set you up on a path that can get you a home loan in a quick and seamless manner. We are the experts who do the work for you for free, while you lean back, rest and rely on our professionalism at absolutely no cost to you.

Our brokers have close links with the best lenders in town and can help you compare Singapore home loans and settle for a package that best suits your home purchase needs. Find out money saving tips here.

Whether you are looking for a new home loan or to refinance, the Mortgage broker can help you get everything right from calculating mortgage repayment, comparing interest rates all through to securing the best home loans in Singapore. And the good thing is that all our services are free of charge. So it’s all worth it to secure a loan through us.

For advice on a new home loan.

For refinancing advice.

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Fortitude Budget targeted to help SMEs cope with Covid-19

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Author: Ravi Philemon

Fortitude Budget targeted to provide further clarity in helping SMEs to survive COVID-19 and its effects

The Singapore government has announced a fourth round of support measures in Parliament on May 26, 2020 to help businesses, workers and households mitigate the coronavirus (COVID-19) impact.

The new “Fortitude Budget” follows the Unity Budget announced on February 18, the Resilience Budget of March 26 and the Solidarity Budget of 6 April, and comes as Singapore is about to ease out of the two-month circuit breaker which lasted from 7 April to 1 June. Schools will reopen but most workplaces will still remain largely shut after 1 June, at least for four weeks during Phase 1.

Known as the Fortitude Budget, this fourth stimulus package will cost a further S$33 billion. The extra stimulus will take the government’s COVID-19 related relief measures to S$93 billion, representing 19.2% of gross domestic product (GDP).

Fortitude Budget targeted

Fortitude Budget targeted to help SMEs cope with Covid-19

Fortitude Budget targeted at saving jobs

Colliers International noted that the central focus for the Fortitude Budget is jobs, with more measures to support workers and businesses who remain affected by border closures and safe distancing measures. Besides enhancing the Job Support Scheme (JSS), more than 40,000 jobs are to be created in public and private sectors, and about 25,000 traineeships will be created this year to help job seekers gain industry-relevant experience. To support digital transformation, the government will pay a Digital Resilience Bonus of up to S$5,000 for F&B, retail businesses that go digital e.g. adopt PayNow Corporate and e-invoicing, as well as business processes or e-commerce solutions.

Fortitude Budget targeted at helping property sector

  • New cash grants to offset rental costs for SMEs

The Singapore government will provide a new cash grant to offset more of the rental costs of small and medium-sized enterprises (SMEs), to be disbursed through property owners. For qualifying tenants of commercial properties, such as shops, the grant will amount to about 0.8 month’s worth of rent. Those in industrial and office properties will get a grant amounting to 0.64 month’s of rent.

Taken together with the earlier property tax rebates earlier (100% for retail properties equivalent to 1.2 months’ rent, and 30% for office and industrial properties equivalent to 0.36 month’s month), the government will, in effect, offset about two months’ of rents for qualifying SME tenants of commercial properties, and about one month for qualifying SME tenants of industrial and office properties.

  • New law to mandate landlords grant temporary rental waiver to SME tenants

The Singapore government will introduce a new bill to mandate landlords grant a rental waiver to small- and medium-sized enterprise (SME) tenants that have suffered a significant revenue drop in the past few months.

The new bill will also cover provisions on temporary relief from onerous contractual terms such as excessive late payment interest or charges. It will also allow tenants to repay their arrears through installments. If the bill is passed by Parliament, SME tenants in commercial properties who have suffered a significant revenue drop will benefit from a total of four months’ of rental relief – shared equally between the government and landlords.

Meanwhile, other SME tenants in industrial and office properties will also be given some relief. They also already benefit from temporary relief from rental payment obligations until October.

Ms Tricia Song, Head of Research for Singapore at Colliers International, said the Fortitude Budget targeted at helping SMEs

“We expect these two new measures, taken together, should provide further clarity in helping SMEs to survive COVID-19 and its effects.

The earlier Temporary Measures bill provided a moratorium in rental payments for affected businesses, but uncertainty of the tenants’ ability to pay after six months still exists, which create a lot of risk to the landlords and entire eco-system. A full four months’ rental relief for SME retail tenants, with landlords sharing half of it, should ensure a better collective outcome for both tenants and landlords.”

Selected measures from Fortitude Budget targeted at property sector

Measures 4th support Budget on 26 May 3rd support Budget on 6 April Supplementary Budget on 26 March Budget on 18 Feb

 

Beneficiaries
Property tax rebates for qualifying commercial properties including shops and restaurants     100% (equivalent to 10% of annual rent or 1.2 month rent) 15% Retail landlords to pass through to tenants
Property tax rebate for hotels, serviced apartments, tourist attractions, MICE venues     100% 30% Hospitality
Property tax rebate for Integrated Resorts     60% 10% Integrated Resorts operators
Property tax rebate for non-residential properties     30% (equivalent to 3% of annual rent or 0.36 month rent) None Industrial, warehouse, office landlords to pass through to tenants
*NEW*Cash grant for qualifying SMEs for property rental 0.8 month rent for SME commercial tenants and 0.64 month for SME industrial and office tenants       SME tenants in private retail, office and industrial properties
Rental waivers for non-residential tenants of state properties

Such as hawker centres, JTC, SLA, HDB, URA, BCA, NParks, and PA

+2 months for hawkers and commercial tenants; +1 month for industrial, office and agricultural; bringing total 5 months for hawkers, 4 months for commercial; 2 months for industrial, office and agricultural tenants +0.5 month for industrial, office and agricultural tenants; rest remained same 0.5 to 3 months 0 to 1 month Non-residential tenants of government agencies
Deferment of income tax payments for companies and self-employed persons     3 months None Industry-wide
Jobs Support Scheme 1 additional month of support til November 2020, will be at the same levels as those provided during the non-“circuit breaker” months. 75% of monthly wages for every local worker in employment, capped at S$4,600, for the “circuit breaker” month of April and May 25% of monthly wages for every local worker in employment, capped at S$4,600, for 9 months til October 2020 None Industry-wide
Enhanced Jobs Support Scheme for Aviation, Tourism, Food Services, Land Transport, Arts & Culture sector; Aerospace, marine, offshore, retail sectors 75% wage offset for those businesses which cannot resume operations post circuit breaker until August, eg. retail outlets, gym and fitness studios, and cinemas.   50- 75% wage offset, capped at monthly wage of S$4,600, for 9 months til end-2020 None Industry-wide
Foreign worker levy waiver/ rebate Foreign Worker Levy waiver and rebate extended by up to 2 months for businesses that are not allowed to resume operations on-site after circuit breaker, and will include all firms in the construction, marine and offshore, and process sectors. The monthly foreign worker levy due in April will be waived.

 

 

 

As early as Apr 21, employers will also receive a foreign worker levy rebate of S$750 for each work permit or S pass holder.

None None Industry-wide
Cash payout and grocery vouchers to households, utility bill credit Households with at least one Singapore citizen will get a one-off S$100 credit in their utilities bill. Additional S$300 cash payout for every Singaporean adult, and one-off payment of S$600 by 30 April S$300 – 900 S$100 – 300 Industry-wide

Source: Colliers International, Ministry of Finance

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SGX (SGX:S68) Declined 12% In One Day – Are MSCI Indexes That Important To SGX

Click on SGX (SGX:S68) Declined 12% In One Day – Are MSCI Indexes That Important To SGX
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https://www.drwealth.com/wp-content/uploads/cropped-drwealth-favicon-32×32.jpg Author: Alvin Chow

SGX made an announcement on 27 May 2020 about gradually discontinuing the offering of MSCI … Read more >>
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Defaulting loan payments can get you into serious trouble

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Author: Ravi Philemon

Although some loans, like personal loans, are easier to get defaulting loan payments can get you into serious trouble

by: Hitesh Khan/

Personal loans are a way to use tomorrow’s income today, and unlike other loan products like mortgage loans or education loans, the process involved to apply for best personal loan is relatively simple.

But you must note that the interest rates are much higher than, say, for a car loan. This is because personal loans are unsecured loans, which means that the personal loan is not backed by any asset. The loan amount and interest rate depend on different parameters such as your income, credit history, repayment capacity, and others.

As even the best personal loan comes with high interest rates, so defaulting loan payments will put you on a downward spiral.

Here are some of the lowest personal loan interest rates offered by various banks:

Personal loans are basically unsecured loans which typically from $1,000 – $100,000 with fixed or variable interest rates that can be used to make a large purchase or to consolidate debt. Borrowers can use personal loans for credit card debt consolidation, business expansions, home improvements, medical bills and other major life expenses. Once recent study showed that personal loans are now the fastest growing consumer debt.

defaulting loan payments

image credit: InvestmentZen

The best personal loan typically has a set term of three to five years and generally charge a fixed interest rate.

One report showed that millennials are driving the growth of the personal loan market. The report added that this category of people are rapidly coming into their earnings and credit wheelhouse – and because it takes time to become creditworthy, a higher proportion of millennials end up taking personal loans.

Even the best personal loan can get you into trouble if you are defaulting loan payments. A loan default or loan delinquency is your failure to make loan repayments when they are due. Extended delinquency can result in a loan default. It is the failure to repay the loan as per the terms agreed between you and credit institution.

When defaulting loan payments, the interests owed on your personal loans snowballs, drastically reducing your credit score and impacting your ability to receive future credit for lives other needs like the best home loans. Besides your personal properties being seized for default, the lending agency will also send a debt collection agency after you. The debt collection agency will try to contact you to repay, and this may include them trying to reach you at your place of work, or at home in full view of all your neighbours.

So, the rule of the thumb is, if you think you are going to be defaulting loan payments, contact your lender to discuss restructuring your best personal loan.

It is better to contact you lender to restructure rather than face the dire consequences of defaulting loan payments, which includes:

  • Employment difficulties,
  • Having money from seized from your accounts,
  • Legal proceedings, and
  • No access to crucial loans.

If the debt collection agency is not able to collect the delinquent loan, sooner or later it will reach a lawyer’s desk, and a collection attorney may take you to court after issuing a final letter calling upon you to pay your debt. If the debt is deemed valid, the court can issue a judgment against you, ordering you to pay it — and legal fees. Once you go to court, your default becomes a matter of public record.

A court judgment may allow a creditor to put a lien on your property, which means that if you ever sell it you’ll be forced to cover over some or all of that debt. A lender or collector can also ask a judge for an execution order.

Fortunately, you lender can’t go to the police to recover the personal loan extended to you. Personal loan cases are treated as civil cases instead of criminal cases, so the police will take a hands-off approach. But be mindful that if the amount owed to all of your creditors (including credit cards and car loans) is at least $10,000, you can be made bankrupt in Singapore.

The problem however isn’t just being declared bankrupt. The Official Assignee can seize your belongings which in Singapore can include, property, tools of your trade, property held in trust for someone else, and even clothing and furniture.

In fact, if you even try to take vacation, you will need the OA’s permission or you can be fined up to $10,000 and/or jailed for up to 2 years.

Most personal loans are granted as unsecured loans. Borrowers don’t necessarily need to have the best credit or even any type of collateral as that is not the primary concern for the providers of these types of loans. Unsecured loans are provided more on good faith and what lenders need to provide are their name, NRIC and income verification.

No collateral is needed so if the loan goes into default, the lender will not get anything in return. Higher interest rates charged are the price to pay for not having collateral or a co-signer on these types of loans.

Because the lender is not operating with any type of collateral from the borrower, they are taking a greater risk. With that great risk comes higher interest rates as that is what a borrower can offer to a lender in that higher risk situation; a bigger rate of return.

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Property value – will it be affected by the current Covid-19 crisis

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Author: Ravi Philemon

Colliers International a leading real estate services agency says the impact on property value will differ among property types

Colliers International in an attempt to answer burning real estate questions in a time of the Covid-19 pandemic said: “property value will differ among property types”.

Ms Stella Seow, Executive Director & Head at Colliers International, answers 3 burning questions on property value:

Has the value of my property been affected by the current situation?
The current pandemic has affected markets across the globe, with very few sectors surviving the turbulence unscathed.

With regards to property values, the impact understandably differs among property types. The best avenue is to engage a professional Property Valuer to ascertain your properties current value. This will also be useful for refinancing purposes particularly while interest rates are expected to remain low.

I want to save on my property tax. How can I do this?
Saving on property tax has always been front of mind for many people. However, the desire for it during this climate has understandably been amplified. Here are some ways you can save on your property tax:

Residential and Industrial
If the rental of the premises has been reduced as a result of the market situation, we suggest you inform IRAS in a timely manner to ensure the Annual Value can be revised downwards and property tax reduced accordingly.

Retail
Provide regular updates on the tenancy, particularly when there is a downward revision of rent. During this period, landlords are given 100% property tax rebate and will have to pass this rebate to the tenants.

Office
Saving on office property tax is similar to retail, however landlords are given only 30% property tax rebate and will have to pass this rebate to the tenants.

I want to have my property valued now, but there are still restrictions in play. Can you still value my property?
Yes, absolutely! As we all continue to embrace new ways of communicating, Colliers has introduced virtual property valuation measures.

We are conducting real-time inspections via WhatsApp or Facetime video calls with our Colliers experts. In addition to the virtual inspection, we will also require photographs of your premises as well as floor plans and floor areas for landed properties.

As always, the banks and financial institutions will still require a valuation to confirm the property’s market value before loan can be disbursed.”

Do you know enough about how property valuation is done in Singapore?

Knowing how to calculate the property value is of paramount importance to a home owner. It can help you determine whether you are overpaying for a home, or whether you have gotten yourself a real bargain. Paying the right price is just one way you can avoid overspending on your property.

Even when you are paying a premium for the home, you need to make sure that you are paying a premium for something in return (e.g. fully furnished home or soothing interior design). You can check with a valuer or you can check with a property agent that has access to a iValue tool at Home Loan Report.

Even when you are paying a premium for the home, you need to make sure that you are paying a premium for something in return (e.g. fully furnished home or soothing interior design). You can check with a valuer or you can check with a property agent that has access to a iValue tool at Home Loan Report.

property value

Picture 1: Property valuation is estimated for the Rivergate Condominium, home loan report by iCompareLoan.com

You can then use that as a first estimate of whether the property is worth buying, alternatively if your agent is telling you the price is 4 million, you can also see that the unit in question is estimated at around $ 3.86m, that gives you some level of guide as to whether the deal is possible or not. However if the agent is telling that the unit is $4.4m while the estimated value is only $3.86m, then it is very likely that the property agent is trying to “manage” you.

Ultimately, it is to help you make a better decision when it comes to choosing a home and also not to get ripped off by lousy sellers. Before you buy a property, you may also want to assess your property loan affordability and downpayment, so that you can be properly assured.

SAMPLE –> Property Buyer Report – Rivergate – iValue to get a feel of how a comprehensive property buyer report can SAVE you thousands or even hundreds of thousands from over-paying.

Ultimately you will not need to do the property valuation in Singapore yourself because there will be valuers who are experienced in doing that job. However the methodology is important to know, because it helps you to understand why a property price will go up or down and the reasons for it.

There are three methods that you can use for property valuation: Income; Direct Comparison (Comparative market analysis); and Residual method. To help our readers understand each of these property valuation methods, the iCompareLoan team has prepared this property valuation guide to dissect everything you need to know about property valuation.

The direct comparison method is probably the property valuation method that people are most familiar with. Among the three types of property valuation methods, direct comparison method is also the easiest to understand. This is one of the main reasons why direct comparison is a popular property valuation method.

You can read about the other property value comparison methods here: https://www.icompareloan.com/resources/property-valuation-singapore/

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