The central bank has raised its cap on special loans to small and medium-sized enterprises (SMEs) suffering due to the COVID-19 pandemic, after companies called for more funds to weather the downturn.
The central bank on April 1 launched a NT$200 billion (US$6.77 billion) special lending program for SMEs at preferential interest rates to help them survive the economic downturn caused by the pandemic.
From tomorrow, SMEs can apply for loans of up to NT$4 million, an increase from NT$2 million, if the SME Credit Guarantee Fund provides a more than 90 percent guarantee, the central bank said.
Alternatively, SMEs can apply for loans of up to NT$16 million, an increase from NT$6 million, if the lender sets aside an 80 percent provision in conjunction with the SME Credit Guarantee Funds, it said.
The adjustments would help meet demand for loans to firms of different economic scale, it added.
Participating lenders have processed more than NT$100 billion of loan applications since April 1 and the central bank said it would inflate the size of the fund if necessary before the program is due to expire on March 27 next year.
The central bank has capped the interest rates for the relief program at between 1 and 1.5 percent in the hope that SMEs would be able to borrow sufficient working capital to stay in business and retain their employees, central bank Governor Yang Chin-long (楊金龍) said.
The program was launched after the central bank on March 19 cut its policy interest rate by 25 basis points to ease the financial burden on cash-strained companies and households, Yang said.
The central bank urged local banks to support the program to help their customers weather difficult times.
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