DBS provides liquidity support to over 3,500 micro and small enterprises, entrenching support for oft-underserved segment
Micro and small enterprises account for eight in ten of all government-assisted SME loans approved by DBS
Industry first contact-free and fully digital loan application and acceptance process for safer and faster access to working capital
Of the more than 3,500 loans approved for micro and small enterprises, around three in ten loans were for customers with no prior relationship with the bank, while over half were for customers with no prior borrowing history with DBS.
Among those with no borrowing history with DBS, the average loan quantum was SGD 250,000, with two out of three borrowing SGD 200,000 and below, of which over 800 borrowed SGD 100,000 and below. Borrowers came mainly from the services(27 per cent), building and construction (13 per cent), general wholesale (12 per cent), food and beverages (11 per cent), and retail (9 per cent) sectors.
Joyce Tee, Group Head of SME Banking at DBS, noted that micro and small enterprises may not be familiar with the financing solutions available to meet their working capital needs, as they have typically flown under the radar of lenders. “While we are committed to supporting all viable SMEs through these difficult times, we are doubling down on our support for micro and small enterprises. Many have sound business models but are facing a cash crunch with business momentum slowing significantly due to the extended safe distancing and circuit breaker measures. Meantime, overheads and contractual expenses still have to be met. We are engaging our micro and small businesses closely to ensure that they have the working capital support they need to meet these challenges.”
The Federation of Merchants' Associations, Singapore (FMAS) is one key stakeholder that DBS is working with to ensure that working capital support reaches the most challenged micro and small businesses. DBS and FMAS have been collaborating on solutions to ease the cash flow challenges faced by heartland enterprises since early April. There are over 15,000 heartland enterprises across 14 town centres in Singapore, spanning a diverse range of businesses, from kopitiam owners to service providers and neighbourhood mom and pop shops.
Yeo Hiang Meng, President of the FMAS, said, “When our stakeholders came to us for help amidst the mighty economic storm, DBS was our most natural port of call. DBS was the first bank in Singapore to work with us on availing Government-assisted SME loans to our heartland businesses, and many of our SMEs have benefitted from their timely support. In fact, DBS has a long history of supporting our heartland enterprises even before Covid-19 situation began unfolding, and we’re thankful that they have chosen to stand resolutely with us during these difficult times.”
Tee added that heartland businesses are an integral part of Singapore’s community as they bring vibrancy to the heartlands and provide a variety of goods and services to Singaporeans from all walks of life. “It would be a shame for promising businesses to fold as a result of conditions they have no control over. We are fighting not only for the survival of these businesses, but for the very spirit of entrepreneurship that forms the bedrock of Singapore’s economy.”
DBS has kept its lending rates low for its SME Working Capital Loan and the Temporary Bridging Loan Programme by tapping the Monetary Authority of Singapore’s SGD Facility for Enterprise Singapore Loans. In doing so, DBS accesses low-cost funding and passes on all cost savings to its SME customers. The bank has also gone one step further by being the first in the industry to waive all processing fees since February, thus removing another cost component. As a result, DBS is able to extend loans from the Enterprise Singapore financing schemes at interest rates averaging 2 to 3 per cent, which are among historic lows for the industry.
Providing SMEs with fast access to working capital in five working days
DBS is committed to ensuring that all viable businesses with liquidity challenges receive working capital financing support in a timely manner. Customers with complete loan applications and full documentation submitted together with their loan application forms can expect to receive working capital monies within five working days of acceptance.
Since March 2020, DBS has seen a surge in the number SME loan applications, and in SMEs’ rush to get access to liquidity, the bank has also seen a surge in incomplete loan applications with little or incorrect supporting documentation. Customers who wish to access working capital fast should:
- Ensure that their loan application forms and supporting documentation are complete at the point of submission
- Ensure that information provided in the forms and documents are accurate and in accordance with the relevant time period requested on the application form
- Get back to the bank in a timely manner when asked for any missing documents during the loan approval process
DBS has also specially tailored its Digital Business Loan to the needs of micro and small businesses, disbursing up to SGD 200,000 in working capital as quickly as the day after approval. To relieve micro and small enterprises of the onerous task of producing audited financial statements, DBS has further simplified the credit documentation process for this loan with no financials required for applications. Instead, customers need only provide their most recent bank statement or Notice of Assessment for their application to be processed.
Keeping SME customers safe with contact-free, digital loan application and acceptance
In an industry first, physical loan application and acceptance procedures, such as filling up physical forms and obtaining wet signatures, have been replaced with remote and digital procedures. With the loan application and acceptance process digitised and made contact-free, customers are now able to receive the financing support they need from the safety of their home offices. Since March 2020, about six in 10 of all SME loan applications have been made through digital channels.
The bank has also rolled out complimentary webinars and online courses to further ease SMEs into the world of digital banking. To date, over 1,000 clients have been trained on how they can transact, trade and manage their banking needs from the comfort of their home offices.
DBS is also equipping all SMEs with a complimentary Covid-19 SME Business Resource Guide to give business owners the insights needed to navigate their businesses through the current economic uncertainty. The guide contains fresh perspectives from industry leaders on how the operating landscape is likely to change as a result of Covid-19, and actionable tips for SMEs to position themselves for recovery and growth as economies in the region look towards a gradual restart. The guide can be downloaded at dbs.com.sg/sme/dbs-forms/businessclass/covid-19-guide
DBS defines companies with annual revenue of less than SGD 1 million as ‘micro SMEs’.
DBS defines companies with annual revenue of between SGD 1 million and SGD 20 million as ‘small SMEs’
Enterprise Singapore’s financing schemes comprise the SME Working Capital Loan and the Temporary Bridging Loan Programme.
Examples include business / management consultancies, design firms, recruitment agencies and travel agencies.
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 11 consecutive years from 2009 to 2019.
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.
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