By Francis Chan

LOCAL banks are reporting a major surge in applications from smaller firms seeking loans under the Government's $2.3 billion initiative to ease the impact of the credit crunch on businesses here.

These firms had found it hard in recent months to obtain credit to help keep their businesses running - but the new loan schemes appear to be working, if application levels are any guide.

DBS Bank said yesterday that applications under the government-backed schemes have soared by up to three times since the enhancements took effect on Dec1 last year. Rival OCBC also reported a major rise in applications, though both banks declined to disclose loan approval numbers. DBS has also become the first bank here since the financial crisis erupted to give details of its SME lending practices - announcing an internal review process.

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