DBS ties up with P2P platforms to expand funding for small firms

A DBS branch at Suntec City.
A DBS branch at Suntec City. PHOTO: ST FILE

DBS Bank is teaming up with two peer-to-peer (P2P) lending platforms to expand funding sources available to small businesses.

The bank has signed cross-referral agreements with Funding Societies and MoolahSense - marking the first such collaboration between established banks and financial technology (fintech) start-ups in Singapore.

Under the partnership announced yesterday, DBS will refer to Funding Societies and MoolahSense some of the smaller businesses the bank is unable to lend to.

The lending platforms, in return, 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 privacy, DBS and the P2P lenders will only share information when they have obtained borrowers' consent in advance, added the bank.

DBS noted that historically, small businesses without audited accounts and personal income statements tend to be underserved as banks find it difficult to credit-assess them, preferring instead to lend to companies that can provide collateral and have an established track record and at least two years of audited accounts.

All three Singapore banks have been looking at ways to beef up their fintech capabilities in recent months.

The initiative follows a collaboration between DBS and Hong Kong-based fintech firm AMP Credit Technologies earlier this year on a new way of making credit assessments for small business loans.

All three Singapore banks have been looking at ways to beef up their fintech capabilities in recent months.

DBS has piloted hackathons for start-ups. In February, United Overseas Bank set up a 100-day accelerator programme for 30 start-ups, while OCBC Bank launched a fintech and innovation unit called The Open Vault to look into collaborating with fintech start-ups.

Ms Joyce Tee, DBS group head of SME banking, said: "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."

Funding Societies co-founder Kelvin Teo noted the partnership is a "win-win relationship that helps SMEs gain access to capital at all phases of their growth journey".

MoolahSense chief executive Lawrence Yong added: "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."

A version of this article appeared in the print edition of The Straits Times on April 20, 2016, with the headline 'DBS ties up with P2P platforms to expand funding for small firms'. Print Edition | Subscribe