SINGAPORE Law and Practice Contributed by: Renu Menon, May Ng, Blossom Hing, SC and Ong Ken Loon, Drew & Napier LLC
the MAS granted four digital banking licences. The digital banks (ie, GXS Bank (backed by a consor- tium comprising Grab Holdings Inc. and Singapore Telecommunications Limited), MariBank (backed by South-east Asian e-commerce giant Sea Limited), Green Link Digital Bank (backed by Chinese developer Greenland Holdings and supply chain financing plat- form Linklogis Hong Kong), and ANEXT Bank (backed by Ant Group)) launched their services in 2022 and 2023. Since then, these digital banks have focused on expanding their product offering and customer base, particularly amongst micro, small and medium enterprises which often face challenges in accessing affordable financing due to their smaller scale, limited operating history and lack of collateral. Singapore’s private credit market remains promising, buoyed by the opportunity for diversification, strong economic growth and strategic government initia- tives. As part of Budget 2025, the Singapore govern- ment announced the launch of a SGD1 billion Private Credit Growth Fund to provide more financing options for high-growth enterprises. The fund will offer non- dilutive, customised financing solutions for activities such as international M&A and large capital overseas expenditures, to enterprises which may not be well served by traditional bank lending. The influx of alternative credit providers has led to more competitive financing terms, faster approval processes and customised financing and repayment structures to meet the evolving needs of businesses and investors. Additionally, alternative lenders often utilise technology to assess creditworthiness, allow- ing greater accessibility to funds for smaller borrower companies that may struggle with traditional bank requirements. This promotes innovation and inclusiv- ity in the borrowing landscape. 1.5 Banking and Finance Techniques Banking and finance techniques in Singapore are evolving to better align with the diverse needs of inves- tors and borrowers. One notable trend is the increas- ing use of HoldCo structures, which allow businesses to raise more capital without increasing leverage at the operating company level. This optimises lending and enhances financial flexibility. The use of preferred equity is also becoming popular because it appeals
to investors, giving them the opportunity to capture a fixed rate return with priority of payment. Fintech solutions have also enabled faster credit assessments and streamlined application processes, catering to the demands of smaller borrower companies and start- ups. These innovations reflect a broader shift towards more responsive and customised financial solutions to suit borrowers’ needs in Singapore. 1.6 ESG/Sustainability-Linked Lending The Singapore government is committed to its objec- tive to issue up to SGD35 billion of green bonds by 2030. As of January 2025, the Singapore government has issued SGD9.2 billion of green bonds to finance the expansion of Singapore’s electric rail network. Since the launch of the Singapore-Asia Taxonomy (SAT) by the MAS in 2023, both domestic and major international banks have been using the SAT as a key reference document to engage clients across the Southeast Asia region. In January 2025, the Ministry of Finance announced an update to the Singapore Green Bond Framework (“Framework”) which gov- erns the issuance of sovereign green bonds under the Significant Infrastructure Government Loan Act 2021 (SINGA). This Framework also acts as a reference for green bond frameworks used by Statutory Boards. Proceeds from these bond issuances are used to finance eligible green expenditures. The updated Framework is aligned with the SAT for green activities and provides transparency on the screening criteria for projects to qualify for green bond financing. In July 2025, the Singapore Sustainable Finance Asso- ciation (SFFA) released the “Guidance for Leveraging the Singapore-Asia Taxonomy in Green and Transition Financing”. This guidance addresses practical chal- lenges faced by market participants when using the SAT to structure credible green and transition financ- ing. It aims to promote broader adoption of the SAT and strengthen sustainable finance practices in the region, thereby supporting the mobilisation of capital toward a more inclusive, resilient and net-zero future. Consonant with updated forecasts that Southeast Asia’s energy demand will increase by over 60% by 2050, driven by population growth and economic development, the demand for financing of conven-
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