DBS approves 3,500 loans to small firms

DBS has approved around 3,500 loans totalling more than $1.1 billion for micro and small enterprises and firms under Enterprise Singapore's financing schemes.

The loans account for 80 per cent of all government-assisted small-and medium-sized enterprise (SME) lending the bank approved between the start of March and the middle of this month, it said yesterday.

About 30 per cent of the 3,500 or so loans were for customers with no prior relationship with the bank, while around 50 per cent were for clients with no borrowing history with DBS.

The average loan for those with no borrowing history with DBS was $250,000.

Borrowers came mainly from the services - they accounted for 27 per cent of the lending - then construction (13 per cent), general wholesale (12 per cent), food and beverage (11 per cent) and retail (9 per cent).

Ms Joyce Tee, group head of SME banking at DBS, 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. In the meantime, overheads and contractual expenses still have to be met."

She noted that many of these companies have typically flown under the radar of lenders and may not be familiar with the options that can meet their working capital needs.

DBS and the Federation of Merchants' Associations, Singapore have been collaborating since the middle of last month on ways to ease the cash flow challenges faced by heartland firms.

There are more than 15,000 such enterprises across 14 town centres here, spanning a diverse range of businesses, from kopitiam owners to service providers and neighbourhood mom-and-pop shops, said DBS.

THE BUSINESS TIMES

A version of this article appeared in the print edition of The Straits Times on May 26, 2020, with the headline 'DBS approves 3,500 loans to small firms'. Subscribe