FSC Taiwan Announces Measures to Address Impact of COVID-19 Pandemic
To ease the loan repayment difficulties of those affected by the COVID-19 outbreak, the FSC Taiwan announced that the Bankers Association of the Republic of China (BAROC) instructs the member banks to institute a debt workout mechanism for borrowers that have problems repaying loans due to the impact of the outbreak. FSC Taiwan also asked BAROC to collect information on the loan products and debt workout measures provided by all banks. FSC Taiwan issued an administrative letter regarding loans to small and medium sized enterprises (including small-scale business operators). Additionally, FSC Taiwan notified entities about the development of a simple scoring form to replace the financial statements and 401 reports to assist small-scale business operators amid COVID-19 outbreak.
In the light of the economic impact due to COVID-19, the government has proposed a number of bailout and revitalization plans. However, small-scale business operators were not able to benefit from these measures because of the lack of financial statements (or 401 statements). Therefore, a simple scoring form has been developed to help small-scale business operators in applying for loans through a simplified process. In addition, to encourage banks, FSC Taiwan has developed incentive measures to reduce the ratio of credit reserve allowance for bad debts from 1.0% to 0.5%.
Related Links
- Press Release on Easing Loan Repayment Terms
- Press Release on Simplified Loan Application Program (in Chinese)
- Letter on Loans to Small and Medium Sized Enterprises (in Chinese)
Keywords: Asia Pacific, Taiwan, Banking, COVID-19, Credit Risk, SME, Regulatory Capital, NPL, Loan Moratorium, Loan-loss Provisioning, FSC Taiwan
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