OCBC's new credit scheme targets 'serial entrepreneurs'

The launch of the Serial Entrepreneur credit scheme follows a 12-month pilot programme that started in October 2017, where more than $100 million in business loans were approved, OCBC Bank said.
The launch of the Serial Entrepreneur credit scheme follows a 12-month pilot programme that started in October 2017, where more than $100 million in business loans were approved, OCBC Bank said.PHOTO: ST FILE

OCBC Bank is introducing a new credit scheme that targets entrepreneurs running more than one business, giving them access to loans "a few months before incorporation" of the new venture.

The bank said the market is sizeable, citing figures that show one in three new businesses incorporated in Singapore between 2015 and 2017 belongs to an entrepreneur already running a business.

The launch of the Serial Entrepreneur credit scheme follows a 12-month pilot programme that started in October 2017, where more than $100 million in business loans were approved, the bank said in a statement.

OCBC said it will take a "comprehensive view of the entrepreneur's experience, business track record and overall business strategy across his or her group of companies".

The approach improves on the current industry model, which evaluates each business on "a standalone basis based on their track record and financial credibility", OCBC said. It is "difficult for start-ups less than two years old to obtain financing, even if the founder has operating businesses and a proven track record", it added.

Ms Joyce Tee, group head of SME Banking at competitor DBS Bank, said over half of the bank's small and medium-sized enterprise customers, who have more than one business, "already have credit facilities with us and are also tapped into our social networks across Asia that provide business and technology networking services".

OCBC said it will take a
“comprehensive view of
the entrepreneur’s
experience, business
track record and overall
business strategy across
his or her group of
companies”.

Mr Mervyn Koh, United Overseas Bank's country head of business banking Singapore, said the bank has developed a credit underwriting engine that uses data analytics to assess new businesses' credit ratings more accurately as they may not have the "necessary credit history".

It uses the bank's existing sources of information and "teams that with new pools of data... (including) the company's day-to-day operations".

"As part of the (loan) evaluation process, the bank also considers the business' viability and factors such as whether it has a pipeline of secured projects," he added.

A version of this article appeared in the print edition of The Straits Times on January 28, 2019, with the headline 'OCBC's new credit scheme targets 'serial entrepreneurs''. Print Edition | Subscribe