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Reply to Parliamentary Question on Individual and SME Borrowers’ Credit Ratings during COVID-19


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Date: For Parliament Sitting on 6 October 2020

Name and Constituency of Member of Parliament

Mr Don Wee, MP, Chua Chu Kang GRC


To ask the Prime Minister whether MAS can provide guidance to (i) financial institutions not to let their individual and SME borrowers’ dismal financial performance in 2020 affect their credit scoring and (ii) credit bureaus to rescind the adverse record of an individual borrower whose repayment ability has been affected by the COVID-19 pandemic.

Answer by Mr Tharman Shanmugaratnam, Senior Minister and Minister in charge of MAS:

1.      The COVID-19 pandemic has significantly disrupted incomes of many individual and business borrowers. The priority is to help them not to miss payments. That is why MAS has been working closely with the financial industry to implement relief measures since March 2020, to help borrowers defer and spread out their monthly repayments. Borrowers who take up the relief measures are able to avoid missing payments, and hence avoid hurting their credit standing.

2.      MAS has also advised financial institutions (FIs) to look beyond the borrower’s short-term cash flow problems when assessing their credit standing. They should take into account any relief measure that the FI and borrower have agreed to, and the borrower’s ability to make full repayment based on the revised loan terms. This will help many borrowers avert a credit downgrade.

3.      MAS therefore encourages borrowers who are concerned about any adverse credit records because they have missed payments as a result of COVID-19 to reach out to their lenders early to tap into the various relief schemes. MAS has recently announced a set of extended support measures to help borrowers on relief ease into making full repayments next year. If the borrowers can service their loans promptly under the revised terms, they will over time be able to restore their credit standing. Further, such loans would not be reported as restructured loans in their credit bureau records.


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Regulator Information

Abbreviation: MAS
Jurisdiction: Singapore

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