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DBS Unveils Blockchain Multi-Tier Financing Solution to Support SMEs

DBS Bank launched its first multi-tier financing solution that is run on a logistics blockchain platform named “Rong-E Lian” to help small and medium-sized enterprises (SMEs) in China to get faster access to trade financing services. 

DBS integrated its digital onboarding service into the blockchain platform with the leverage of Application Programming Interface (APIs) to help the bank verify the credentials of a supplier within seconds before offering digital trade financing services to upstream suppliers, which are often the SMEs, within 24 hours. 

DBS Bank partnered with a leading Chinese logistics player to develop the Rong-E Lian blockchain platform, which in August 2019 successfully provided the digital trade financing solution to more than 1,000 suppliers in the logistics company’s supply chain ecosystem. 

The solution was designed to give benefits to suppliers including SMEs which may have limited access to trade financing due to their lack of scale and credit history. This is also one of DBS’s initiatives to strengthen its partnership with other businesses in the Greater Bay Area region, including Guangdong, Hong Kong and Macau. 

DBS China’s CEO Neil Ge said, “Cash flow is important to support the substantiality of all businesses, adding that it is even more significant to SMEs.”

According to Ge, more than half of SMEs worldwide are rejected by financial institutions when applying for trade financing services, which contribute to the world’s trade finance gap of US$1.3 trillion. 

DBS China’s Head of Large and Mid-Cap Corporates Ginger Cheng said that DBS sees a potential of huge growth in the region, adding that the move was a groundbreaking transaction for DBS in China using digital technologies to develop new business models with the bank’s corporate clients. 

DBS also previously introduced a blockchain trade financing platform for the automotive sector in China before this initiative.

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