Ant Group's first overseas digital wholesale bank to offer loans to SMEs

ANEXT Bank says it will focus on providing digital financial services to local and regional micro, small and medium-sized enterprises. PHOTO: ST FILE

SINGAPORE - Ant Group, the Chinese financial technology giant controlled by billionaire Jack Ma, on Monday (June 6) marked the start of an expansion outside of Greater China with its first digital wholesale bank in Singapore. 

ANEXT Bank, a wholly owned subsidiary of Hangzhou-based Ant, is one of two digital banks that bagged a licence from the Monetary Authority of Singapore (MAS). Mr Ma’s Internet company Alibaba owns about 30 per cent of Ant.

Singapore-based ANEXT Bank said it would focus on providing digital financial services to local and regional micro, small and medium-sized enterprises (SMEs), especially those engaging in cross-border operations for growth and global expansion.

The digital bank received the MAS' approval on June 2 and will offer online services from the third quarter of the year.

That is when SMEs can set up an online ANEXT Business Account and a dual-currency deposit account with proprietary security measures, including three-factor authentication verification. They will also be able to take advantage of features such as remote onboarding and daily interest.

ANEXT Bank’s chief executive, Ms Toh Su Mei, said interest rates offered will be pegged to the market. 

She told the media that the bank can help SMEs in Singapore explore opportunities in Greater China and facilitate trade connections. 

The digital bank has entered into a two-year agreement with Proxtera - an entity that digitally connects business-to-business marketplaces, service providers and trade associations - to improve cross-border trade among SMEs and businesses.

ANEXT Bank is Proxtera’s first participating digital wholesale bank in Singapore and will provide financing solutions to the buyers and sellers on the network.

Proxtera CEO Saurav Bhattacharyya noted that the aim is to help or work with the underserved or unserved, which is a new stream of revenue for the company.

“There are multiple trade corridors with China that we might be looking to empower, but our scope of partnership is first of all to enable the financing itself, and SMEs are in need of financing,” he said.

When asked about how the digital bank will be impacted by China’s slowdown, the mainland’s tightened rules on tech companies and the tech layoffs there, Ms Toh said the bank is “well-capitalised”.

There are no details regarding the target percentage of revenue that ANEXT would contribute to Ant Group so far, given that the team is “just starting up” and it is still too premature to share.

“We are not even into the full launch yet. So the focus is really on building a sustainable business model in order to serve the SMEs,” said Ms Toh.

Without giving away how big the team is now and how many more she will hire, Ms Toh said that “we will be expanding the team as we expand our business”. 

MAS chief fintech officer Sopnendu Mohanty, who was at the soft launch of the bank, noted that one of the advantages of having ANEXT is that Singapore’s local talent will be trained. He added that he is expecting the bank to “hire a lot” of talent here and train them.

The launch of ANEXT Bank comes after Greenland Group-backed Green Link Digital Bank announced last Friday that it is open for business. The two digital wholesale banks each snagged a licence from the MAS in 2020.

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