Historically, small businesses without audited accounts and personal income statements tend to be underserved as banks find it difficult to credit assess them. Instead, banks prefer to lend to companies which can provide collateral, have an established operating track record and at least two years of audited accounts.
In Singapore, DBS is able to pioneer the provision of credit to these underserved small businesses, because of an innovative new approach it is taking to assess applications and manage credit risk. Working with AMP Credit Technologies, a leading financial technology provider headquartered in Hong Kong, it is able to use electronically verifiable cash flows, such as card payments, to assess each application. These electronic cash flows are studied and measured against sector models of payments and collections and a credit assessment is made accordingly.
DBS mLoan is designed for small businesses that accept card payments and have been in operations for at least six months. The application process is simple and fast, with minimal paperwork required. Conveniently for the borrower, repayments are automatically drawn from their existing business bank accounts daily, over a typical loan tenor of three to 12 months. Small businesses in the service industry, such as retailers, restaurants and e-commerce merchants will benefit from this new loan product. They typically need more working capital for a short period of time, such as during the festive season when there is peak demand.
Joyce Tee, Regional Head of SME Banking, DBS Bank said: “We are committed to constantly innovating and helping all our SME customers grow, irrespective of their industry or stage of growth. Leveraging advanced credit and data analytics, we are able to design a working capital loan for these small businesses that might otherwise be under-served.”
Thomas DeLuca, CEO of AMP Credit Technologies, said: “We are very pleased to be working on this exciting initiative with DBS, which is a frontrunner in innovative thinking. With DBS’ leadership and AMP’s patented platform, Singapore small businesses will finally have an option to obtain working capital that is equitable, transparent and convenient. We look forward to working with DBS for a successful rollout in Singapore and ultimately across the region.”
Matthew Gamser, CEO of the SME Finance Forum, which is established by the G20 Global Partnership for Financial Inclusion, commented: “I am really excited about this new partnership between AMP and DBS. There has been much talk about alternative lenders and fintechs taking business away from banks. While it is a significant new development in the field of SME finance, it still only represents a very small fraction of the financing going to SMEs. Far less has been said about innovators using the same alternative approaches in partnership with large banks, combining innovative credit risk and credit process management approaches with the vast untapped potential of the banks’ internal client data resources. Partnerships such as DBS-AMP demonstrate how joining up banks with fintech can take SME finance much farther, faster than can disruption.”
About DBSDBS - Living, Breathing AsiaDBS is a leading financial services group in Asia, with over 280 branches across 18 markets. Headquartered and listed in Singapore, DBS has a growing presence in the three key Asian axes of growth: Greater China, Southeast Asia and South Asia. The bank's capital position, as well as "AA-" and "Aa1" credit ratings, is among the highest in Asia-Pacific. DBS has been recognised for its leadership in the region, having been named “Asia’s Best Bank” by The Banker, a member of the Financial Times group, and “Best Bank in Asia-Pacific” by Global Finance. The bank has also been named “Safest Bank in Asia” by Global Finance for seven consecutive years from 2009 to 2015.
DBS provides a full range of services in consumer, SME and corporate banking activities across Asia. As a bank born and bred in Asia, DBS understands the intricacies of doing business in the region’s most dynamic markets. These market insights and regional connectivity have helped to drive the bank’s growth as it sets out to be the Asian bank of choice. DBS is committed to building lasting relationships with customers, and positively impacting communities through supporting social enterprises, as it banks the Asian way. It has also established a SGD 50 million foundation to strengthen its corporate social responsibility efforts in Singapore and across Asia.
With its extensive network of operations in Asia and emphasis on engaging and empowering its staff, DBS presents exciting career opportunities. The bank acknowledges the passion, commitment and can-do spirit in all of our 22,000 staff, representing over 40 nationalities. For more information, please visit www.dbs.com.
About AMP Credit TechnologiesAMP Credit Technologies (“AMP”) is a leading financial technology platform provider enabling banks and non-bank financial institutions to profitably offer short-term unsecured loans to promote the financial inclusion of historically underserved small businesses. AMP’s loan origination and automated portfolio management and repayment system, patented in Singapore and other markets, provides innovative credit modeling enhanced with daily performance data and ongoing risk management on a white-label platform basis.
AMP is a founding member of the SME Finance Forum, established by the G20 Global Partnership for Financial Inclusion (GPFI) as a knowledge center for data, research and best practice in promoting SME finance, and managed by the International Finance Corporation (IFC). AMP has also been recognised by SWIFT as a ‘growth-stage innovator’ and was selected by Accenture to participate in the inaugural FinTech Innovation Lab Asia-Pacific. AMP Credit Technologies has offices in Hong Kong, Singapore, the Philippines, and the United Kingdom, with expansion plans across Asia and Europe. For more information, please visit www.amp-creditech.com.
About SME Finance ForumThe SME Finance Forum works to expand access to finance for small and medium businesses. The Forum operates a global membership network that brings together financial institutions, technology companies, and development finance institutions to share knowledge, spur innovation, and promote the growth of SMEs. Initiated by the G20 Global Partnership for Financial Inclusion in 2012, the Forum is managed by the International Finance Corporation (IFC).
