DBS provides liquidity support to micro and small enterprises

DBS has approved over 3,500 loans totalling over SGD 1.1 billion for micro and small enterprise customers during the COVID-19 period, under Enterprise Singapore’s financing schemes.

This accounts for eight in ten of all Government-assisted SME loans that the bank has approved between the start of March 2020 and mid-May 2020.

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,” she said.

“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,” she continued.

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.

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.

Guiding SMEs into digital banking and the COVID-19 era

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.