The Financial Supervisory Commission (FSC) has this week pressed financial institutions not to aggressively retrieve loans extended to small- and medium-sized enterprises (SME) as part of an effort to prevent a potential cash flow crisis within the sector.
In its report to a National Assembly committee, the FSC said that it would try to achieve a soft landing for SME loan delinquency through stronger monitoring and changes to the current maturity structure of SME loans.
“There are two sides to the SME issue. To improve the soundness of financial institutions, tougher screening rules for SME loans are required and delinquent companies should be shut down. But at the same time, we also need to give further support to SMEs for labour stability and economic recovery,” the FSC said.
