Inderjit Singh, chairman of the Action Crucible for Financing, said today Singapore is putting finishing touches to its first asset-backed securitisation aimed at supporting small- and medium-sized enterprises (SMEs).
The private sector body has been working for several years to find ways to help cash-starved SMEs and believes that bonds backed by loans is the best way to go for now.
Singapore's 100,000 SMEs face difficulties getting loans from banks, which, although cash rich, can be conservative in their lending to untested firms. The government is also keen to promote more start-ups.
The securitisation is expected to involve SG$300 million to SG$500 million (US$175m – US$290m) in up to four tranches of bonds backed by bank loans to SMEs and issued via a special purpose vehicle (SPV).
The tranches are expected to bundle loans of differing risk, with the government expected to subscribe to the riskiest offering.
