DBS BankDBS Bank has launched a multi-tier financing facility on a logistics blockchain platform called Rong-E-Lian, to help small and medium-sized enterprises (SMEs) in China get faster access to trade financing.

The Singapore-based bank has partnered with a Chinese logistics player for the platform, which offers financing solutions to over 1,000 suppliers in the company’s supply chain ecosystem.

The multi-tier financing solution will be particularly beneficial to suppliers which are embedded beyond the first layer of the logistics supply chain ecosystem, as they include SMEs which may have limited access to trade financing due to their lack of scale or credit history, the company said.

“Cash flow is critical to the sustainability of any business, but even more so for SMEs. However, more than half of SMEs globally tend to face rejection by financial institutions for their trade finance needs, contributing to the world’s trade finance gap of USD 1.3 trillion. By using new technologies such as blockchain and APIs, we hope to democratise trade finance by providing SMEs more affordable and convenient access to bank credit to enable them to realise their business ambitions, serve their customers well and expand into new markets with ease,” said Neil Ge, CEO of DBS China.

Using DBS’ Application Programming Interface (APIs), the bank has integrated its digital onboarding service onto the blockchain platform. This will allow DBS to verify the credentials of the supplier quickly and once it is verified, the bank can offer the financing within 24 hours.

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by Krishna V Kurup
Senior Market Analyst at IBS Intelligence
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