DBS Launches its first multi-tier financing facility on blockchain platform to help SMEs in China get faster access to trade financing
Leverages new technologies, allowing it to provide digital trade financing to more than 1,000 suppliers in logistics supply chain ecosystem within 24 hours
Developed in partnership with a leading Chinese logistics player, Rong-E Lian offers multi-tier financing solutions to more than 1,000 of suppliers in the company’s supply chain ecosystem. The multi-tier financing solution is particularly beneficial to suppliers embedded beyond the first layer of the logistics supply chain ecosystem, as they include SMEs which may have limited access to trade financing due to their lack of scale or credit history.
Leveraging on DBS’ Application Programming Interface (APIs), the bank integrated its digital onboarding service into the blockchain platform, allowing DBS to verify the credentials of a supplier within seconds. Once credentials are verified, the bank is then able to offer digital trade financing services to upstream suppliers, often SMEs, in the ecosystem within 24 hours.
Neil Ge, CEO of DBS China, said: “Cash flow is critical to the sustainability of any business, but even more so for SMEs. However, more than half of SMEs globally tend to face rejection by financial institutions for their trade finance needs, contributing to the world’s trade finance gap of USD 1.3 trillion . By using new technologies such as blockchain and APIs, we hope to democratise trade finance by providing SMEs more affordable and convenient access to bank credit to enable them to realise their business ambitions, serve their customers well and expand into new markets with ease.”
DBS has successfully completed its first multi-tier financing transaction on the Rong-E Lian blockchain platform with suppliers in the China-based logistics supply chain ecosystem in August. This comes on the back of the bank’s other efforts to explore initiatives to deepen and broaden its partnership with businesses in the Greater Bay Area region. For instance, DBS was the first foreign bank to digitalise cross-border settlements with a one-stop digital payments and collections solution called DigiDocs in July. In addition, DigiDocs also offers the online booking of foreign exchange rates, allowing DBS customers to select their preferred exchange rate according to market real-time quotes for remittance payments.
Ginger Cheng, Head of Large and Mid-cap Corporates, Institutional Banking Group, DBS China said, “DBS believes in the huge growth potential in the Greater Bay Area, also known for being the ‘Silicon Valley of the East’. This is a groundbreaking transaction for DBS in China as we use digital technologies to develop new business models with our corporate clients. As part of our digital transformation strategy, we integrated financial services into the blockchain platform to develop a new business model and better serve upstream suppliers. As such, we are able to provide integrated trade financing, giving suppliers easy access to financing on-the-go. This is especially beneficial to SMEs as they are offered credit on better terms. We look forward to collaborating with more companies to co-create innovative digital client solutions for supply chains in China.”
Committed to building digital trade ecosystems
Last year, DBS launched several digital trade ecosystems. To find out more, please click on the following links:
- HeveaConnect - a digital trading marketplace for sustainable rubber
- Agrocorp - a digital trade platform for commodities
- Wanxiang - a digital trade platform for automotive supply chain
 Multi-tier financing refers to providing financing beyond the anchor company’s direct suppliers, to 2nd, 3rd… to nth tier suppliers embedded deeper in the supply chain.
DBS is a leading financial services group in Asia with a presence in 18 markets. Headquartered and listed in Singapore, DBS is in the three key Asian axes of growth: Greater China, Southeast Asia and South Asia. The bank's "AA-" and "Aa1" credit ratings are among the highest in the world.
Recognised for its global leadership, DBS has been named “World’s Best Bank” by Euromoney, “Global Bank of the Year” by The Banker and “Best Bank in the World” by Global Finance. The bank is at the forefront of leveraging digital technology to shape the future of banking, having been named “World’s Best Digital Bank” by Euromoney. In addition, DBS has been accorded the “Safest Bank in Asia” award by Global Finance for ten consecutive years from 2009 to 2018.
DBS provides a full range of services in consumer, SME and corporate banking. As a bank born and bred in Asia, DBS understands the intricacies of doing business in the region’s most dynamic markets. 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 27,000 staff, representing over 40 nationalities. For more information, please visit www.dbs.com.