DBS inks cross-referral agreements with peer-to-peer lending platforms Funding Societies and MoolahSense
Small businesses to access more funding sources with the collaboration
The partnership enables DBS to refer some of the smaller businesses that the bank is unable to lend to, to Funding Societies and MoolahSense. In return, the p2p lending platforms will refer borrowers who have completed two successful rounds of fund raising to DBS for larger commercial loans and other financial solutions such as cash management. To safeguard borrowers’ privacy, the bank and p2p lenders will only share information when they have obtained borrowers’ consent in advance.
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.
Given its support of the SME sector, over the years, DBS has been expanding the range of solutions it offers to small businesses and now services over 100,000 SMEs in Singapore. The bank has also grown its borrowing base by more than 10% in 2015. Under SPRING Singapore’s Micro Loan Programme (MLP), DBS receives an average of 1,800 SME applications a year. This is more than 50% of all micro loan applications supported by SPRING in Singapore. Hence, DBS accounted for the highest number of loans and loan quantum under the MLP between 2011 and 2015. Last year, the bank also launched a venture debt programme which provides financing to tech start-ups. Its latest p2p partnerships expands the range of alternative funding options further.
Said Joyce Tee, Group Head of SME Banking, DBS, “DBS’ partnership with Funding Societies and MoolahSense is a good example of how traditional and alternative finance providers can work together to support the funding needs of small businesses. Such partnerships are becoming common in markets such as the UK and we are pleased to partner two leading p2p lenders in Singapore in this pilot programme.”
"We are honoured to collaborate with DBS, making this the first tie-up in Singapore between a p2p lending platform and an established bank. This is a win-win relationship that helps SMEs gain access to capital at all phases of their growth journey. We are confident that this partnership will greatly benefit both SMEs and investors, bringing more quality opportunities in alternative financing and alternative investment to the society," added Kelvin Teo, co-founder, Funding Societies.
Lawrence Yong, CEO, MoolahSense said, “As the pioneer platform in marketplace lending, this landmark partnership culminates our early engagement with DBS and sets the stage for deeper collaboration between established financial institutions and emerging fintechs. MoolahSense is honoured to partner DBS, a leading financial institution and a frontrunner in banking innovation. Through this partnership, the funding continuum is being extended with more financing solutions to support the growth of local SMEs – the backbone of our economy.”
This latest initiative marks another collaboration between DBS and fintechs. Earlier this year, DBS had also piloted a new way of making credit assessments for small business loans, by working with AMP Credit Technologies to launch a working capital loan for small businesses that accept card payments and have been in operation for at least six months. Instead of relying on financial statements, personal income statements and physical collateral, the joint credit assessment takes into account electronically verifiable cash flows to assess the health of the businesses and their ability to repay.
DBS - Living, Breathing Asia
DBS 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 Funding Societies Pte Ltd
Founded in 2015, Funding Societies Pte Ltd is a Singapore-based Fintech start-up, offering an online peer-to-peer lending platform for Small-Medium Enterprises to secure loans for growth. It provides SMEs access to quick and equitable funding from individual and institutional Lenders. Its vision is to help SMEs and Lenders in their growth journey, and contribute to the improvement of societies in Southeast Asia. For more information, please visit www.fundingsocieties.com.
MoolahSense is the pioneer, most trusted and legally compliant crowd-financing platform in Singapore that connects businesses, mainly growth SMEs, who are seeking short-term loan financing to prospective investors. MoolahSense is an online platform that empowers individuals to stimulate economic growth by providing finance directly to growth businesses, in exchange for an attractive rate of interest. Our Mission: (1) Help businesses grow via a collaborative funding platform; (2) Provide the Investor community with more choices of attractive yields