Loans to Singapore residents rose 6.1% in 2025, driven by a turnaround in manufacturing sector lending and a pickup in consumer lending including housing loans.

Lending Growth and Record Levels

Loans to Singapore residents expanded by 6.1% in 2025, reaching a record high of SGD 902.3 billion in March 2026, according to Monetary Authority of Singapore (MAS) data compiled by Trading Economics. The full-year growth rate is consistent with the 5.8% increase in total bank lending reported by MAS for calendar 2025, which brought aggregate lending to SGD 10.26 trillion. The acceleration from the 3.8% year-on-year growth recorded in the second quarter of 2025 reflects broad-based improvement across both corporate and consumer segments.

Business loans climbed to SGD 528.3 billion in the fourth quarter of 2025 from SGD 523.6 billion in the preceding quarter, while by March 2026, corporate lending had risen further to SGD 547.6 billion. Consumer loans expanded to SGD 354.7 billion over the same period, up from SGD 352.2 billion in February 2026.

Manufacturing Sector Lending Turnaround

The manufacturing sector posted a notable recovery in borrowing, with manufacturing lending rising to SGD 27.4 billion in the fourth quarter of 2025 from SGD 26.6 billion in the third quarter. This pickup mirrors improving factory conditions: overall manufacturing production increased 14.3% year-on-year in November 2025, driven primarily by biomedical output. Singapore's role as a regional pharmaceutical manufacturing hub has supported demand for working capital and capacity-expansion financing, as drug production is equipment-intensive and supply-chain-heavy.

The shift toward pharmaceutical manufacturing has implications for credit cycle dynamics. A more pharma-heavy industrial mix reduces the economy's sensitivity to electronics swings and ties credit demand more closely to long-term healthcare investment cycles. The financing requirements for specialized manufacturing facilities, clean-room infrastructure, and regional logistics networks are structurally different from the inventory and trade-finance needs that dominate electronics-driven cycles.

Consumer and Housing Loan Expansion

Consumer lending provided a second pillar of growth. Housing and bridging loans increased to SGD 248.3 billion by March 2026, up from SGD 246.8 billion in February 2026, while credit card balances rose to SGD 17.4 billion from SGD 17.3 billion over the same period. Car loans also edged up to SGD 9.7 billion. Notably, credit card rollover balances reached a record SGD 9.07 billion in late 2025, a trend that IFS Capital Group identified as the primary driver behind debt consolidation loans, which accounted for 26% of underserved borrower loan purposes.

Loan repayment quality improved sharply. On-time repayment rates hit 86% in 2025, a post-pandemic record and a significant increase from 65% in 2024 and the 36–65% range that prevailed between 2020 and 2024. The improvement reflects stronger household balance sheets and generally healthy consumer credit profiles across both bankable and underserved segments, according to IFS Capital Group.

Loans Outstanding (SGD billion) (SGD billion)Source: Orionmano Industries

Construction Credit and Sector Divergence

Not all sectors participated equally in the lending expansion. Building and construction loans edged down to SGD 179.5 billion from SGD 179.7 billion, indicating that higher interest rates and project pipeline uncertainties are moderating borrowing in property-related segments. The divergence between manufacturing and construction credit underscores an economy running on multiple speeds, with some capital-intensive sectors expanding while others consolidate.

General commerce lending rose to SGD 92.0 billion from SGD 90.3 billion, and transport, storage, and communication loans increased to SGD 44.7 billion from SGD 44.3 billion. Financial and insurance activities borrowing expanded to SGD 142.6 billion by March 2026, up from SGD 141.5 billion in February.

Outlook and Underlying Dynamics

The MAS Macroeconomic Review published in October 2025 noted that domestic financial conditions had eased, with domestic interest rates and bond yields falling through the third quarter. The equity market advanced 7.8% between July and September 2025, and money supply (M2) rose 9.5% year-on-year in August, partially driven by strong loan growth and repatriation flows.

Forward-looking projections from Trading Economics econometric models suggest that loans to the private sector could reach approximately SGD 960 billion by 2027 and SGD 1.0 trillion by 2028, contingent on sustained economic expansion and stable credit conditions. However, policymakers and market participants will be monitoring whether the recent lending surge reflects durable investment for capacity expansion or shorter-term inventory and working-capital needs, particularly given the structural shift toward pharmaceutical manufacturing and the persistent debt consolidation patterns among consumers.