DBS rolls out deal for Singapore social enterprises

It tailors package to provide financing options and business mentoring for SEs
Lynette Khoo, Business Times 18 Mar 08;

IN a first move among banks to reach out to some 150 social enterprises (SEs) in Singapore, DBS Bank yesterday launched a banking package tailored to provide the financing that is often lacking for these organisations.

DBS Bank is also setting up business mentoring clinics, where experienced bankers at DBS would provide social enterprises with the financial and business know-how.

The SEs that qualify for the DBS Social Enterprise Special Package would have to fall under the SE definition by the MCYS and achieve double bottom lines - social dividends and profits, said DBS Bank's managing director for enterprise banking Lim Chu Chong.

This, he noted, is an extension of DBS' enterprise banking, which currently serves commercial enterprises.

The special package offers social enterprises preferential rates on business loans and unsecured overdrafts as well as fee waivers for a slew of services, among other benefits.

The interest rate payable by social enterprises on secured overdrafts and business loans is 10.5 per cent a year, at least two percentage points lower than comparable rates charged to commercial borrowers.

DBS Bank would also waive fees for the use of its cash management services for the first year for SEs under this package. Employees of social enterprises can enjoy special privileges for a whole range of personal banking services, including mortgage loans, renovation loans, auto loans, credit cards and general insurance.

DBS Bank head of business solutions group, enterprise banking, Davy Goh, said this standard package is appropriate for most social enterprises but looking ahead, the bank will seek to provide customised packages .

In a study conducted by the Social Enterprise Committee chaired by by Spring Singapore chairman Philip Yeo, social enterprises would benefit from more financing options, business mentoring and training. A key recommendation of the SE Committee in December last year was to encourage diversified sources of funding beyond grants, from private companies, venture capitalists and banks.

Mr Lim said that while the banking services are available to all SEs, the eligibility of SEs for DBS corporate loans will be assessed in the same way as commercial small and medium enterprises.

For instance, DBS Bank will assess an SE's years of operation and profitability, account integrity and credit history.

The package is expected to be profitable for DBS Bank, he added, though the basic banking services portion may not be profitable on a standalone basis.

DBS Bank is also seeking to engage like-minded customers to provide business mentoring to social entrepreneurs and supporting social enterprises in the bank's procurement of goods and services where appropriate, said Mr Lim.