TAIPEI ⸺ Taiwan will offer another T$100 billion ($3.60 billion) in loans to help small- and medium-sized firms hit by the COVID-19 pandemic, the government said on Thursday, while sources said almost $20 billion may be made available.
Taiwan’s central bank last year made T$300 billion ($11 billion) available to help small- to medium-sized enterprises (SMEs) cope with the impact of COVID-19, which is now surging in parts of Taiwan after months of being well under control.
The central bank typically provides the money to commercial banks at a low interest rate which they can disperse to companies which apply for support.
A further T$100 billion would be provided to help SMEs, the government announced at a news conference on Thursday.
But Taiwan’s state-owned banks have set aside T$550 billion for the next round of loan help “to assist through this difficult time”, a source briefed on the matter told Reuters.
A finance ministry official said that they had asked the state-owned banks how much money they could make available, and the answer was around T$550 billion.
The central bank declined to comment.
Another second source said the central bank had spoken with banks about the issue.
“The central bank has sent emails to banks, asking them to asses how much money they could make available if SME customers apply for a further year of loans,” the source said.
All sources spoke on condition of anonymity as they were not authorised to speak to media.
While export-dependent Taiwan’s tech firms have boomed on the back of global demand for laptops and tablets for people working from home during the pandemic, its tourism and transport industries have suffered.
Taiwan is currently in a state of semi-lockdown to control a surge in COVID-19 cases, with gatherings limited, entertainment venues shut and restaurants offering only take-out service.
The government has repeatedly said the economy and stock market’s fundamentals remain strong, and the key semiconductor industry has not been affected.
Taiwan’s parliament is considering an extra T$210 billion in spending to help the economy deal with the pandemic.
($1 = 27.7710 Taiwan dollars)
Reporting by Liang-sa Loh; Writing by Ben Blanchard; Editing by Himani Sarkar and Jacqueline Wong; Reuters