DBS rolls out lending initiative, rebates for Singapore SMEs facing headwinds

Singapore's largest lender DBS is extending more support to small and medium-sized enterprises (SMEs) in the Republic, as they brace against economic headwinds. 

More local businesses are expecting a drop in their revenue and profit margin as the economy slows, with trade tensions being a top concern among them, as seen from a survey by the Singapore Chinese Chamber of Commerce and Industry in August.

"More recently with the ongoing issues arising from the US-China trade war, our SME customers are facing overall weaker market sentiments and as a result, the lack of consumer confidence has negatively impacted sales revenues and trade flows," said Joyce Tee, the bank's managing director and group head of SME banking, in emailed replies to The Business Times.

In anticipation of SMEs' need for more cashflow, DBS has thus introduced a predictive lending programme where data around SMEs’ banking and business activities is analysed to predict when they might need more cashflow. The bank can then extend additional working capital loans and standby loan facilities to identified clients even before they apply for it.

For businesses potentially facing trade challenges, DBS will also offer trade financing rebates on handling fees for trade transactions, particularly to support clients who have the biggest uplift in business turnover during the year-end period. The rebates will vary based on each customer's business. 

The increased help for SMEs - which account for 99 per cent of all enterprises and about 65 per cent of local employment - comes at a time of economic uncertainty.

Earlier this month, private-sector economists in the Monetary Authority of Singapore's quarterly survey of professional forecasters slashed their full-year growth forecast for Singapore to 0.6 per cent, down from their 2.1 per cent prediction in June.

But at the end of the day, the SME community and the ecosystem supporting it in Singapore is resilient, Ms Tee added. 

"I believe that SMEs can only grow up and up as long as they are prepared to invest in future proofing themselves and expand their businesses with a practical and positive mindset," she said. 

United Overseas Bank (UOB) and OCBC Bank, the next two biggest banks operating in Singapore, do not have new initiatives for SMEs amid the economic slump, but reiterated their support for them. 

“We always maintain flexibility in pricing for our SME customers, especially during challenging times," said Christie Chu, OCBC's head of emerging business and commercial banking cash, global commercial banking.

Beyond pricing, the bank also looks at ways to help customers grow their businesses, Ms Chu said, from introducing them to digital solutions, to helping them to expand outside the local market. 

Many businesses also face the "constant concern" of managing rising costs, noted Mervyn Koh, country head of business banking, Singapore at UOB. 

To that end, the bank currently has digital solutions - among other offerings - to help SMEs automate operational processes and thus, increase their efficiency.