Foreign acquisitions of finance firms allowed

SINGAPORE — To provide greater flexibility for finance companies to explore strategic partnerships and innovative business models, the Monetary Authority of Singapore (MAS) yesterday also announced the lifting of restrictions on foreign takeovers of these firms.

MAS deputy managing director Ong Chong Tee said the liberalisation of the shareholding policy for finance companies will facilitate their efforts to invest in new capabilities to enhance their core SME (small and medium enterprise) financing business.

“These changes are part of MAS’ ongoing efforts to ensure that our financial sector continues to be able to support enterprise development,” he said.

The move would pave the way for foreign players with innovative technologies to enter the Singapore market. In countries such as the United States, finance houses provide loans via online platforms for example.

The central bank said that it is prepared to consider an application for a merger or acquisition if the “prospective merger partner or acquirer commits to maintaining SME financing as a core business of the finance company”.

“In addition, the merger partner or acquirer must be able to demonstrate expertise in SME financing and present proposals to enhance the finance company’s SME lending activities with new technologies, methodologies or business models,” the MAS said. ANGELA TENG