OCBC’S total sustainable financing for small and medium-sized enterprises (SMEs) grew by more than 40 per cent year on year, surpassing S$9 billion in 2024, up from more than S$7 billion in 2023.
As at Dec 31, 2024, the bank provided nearly 4,000 SMEs across Singapore and the region with sustainable financing – more than trebling from around 1,200 SME customers in 2023.
The sharp increase in such customers – and a corresponding decline in average loan sizes – reflects a push towards financing smaller SMEs, OCBC head of global commercial banking Linus Goh told reporters at a briefing on Tuesday (Feb 11).
Having built sustainable financing relationships with mid-to-large firms over the years, the bank has been able to “move within the value chain” to finance smaller players that supply to or work with these larger companies.
For smaller SMEs, loan sizes typically range from S$1 million to S$2 million, while mid-sized firms generally borrow between S$3 million and S$10 million, he said.
In 2024, OCBC extended sustainability-linked loans (SLLs) to more than 110 SMEs, more than quadrupling from the previous year.
Singapore-based SMEs accounted for about 80 per cent of these loans, with the remainder distributed across Malaysia, Hong Kong and Indonesia. The top three sectors were manufacturing, services and construction.
Unlike other forms of sustainable financing, SLLs require borrowers to meet sustainability performance targets at various stages of the loan.
To encourage more SMEs to take up SLLs, OCBC has partnered Enterprise Singapore (EnterpriseSG) to launch an initiative that provides funding support for SMEs to adopt carbon measurement tools and obtain environmental, social and governance (ESG) ratings.
Under the OCBC SME Start-ESG Programme, EnterpriseSG will fund up to 70 per cent of eligible costs for annual sustainability assessments over a three-year period.
To assess the sustainability performance of participating SMEs, OCBC has partnered sustainability platform EcoVadis and carbon management solution provider ESGpedia.
The bank expects 300 SMEs to participate in the programme over the next three years, with plans to eventually extend SLLs to these businesses.
On Tuesday, Goh also provided an update on the OCBC Women Unlimited programme, which was launched in April 2024 to support SMEs led by female entrepreneurs.
As at Dec 31, 2024, the bank had extended around S$50 million in loans to nearly 300 women-owned businesses.
Source: The Business Times (Link HERE)
February 19, 2025
