DBS ties up with China's Haier Group to offer digital distributor financing

DBS announced on Thursday that it is partnering Chinese consumer electronics maker Haier Group to provide digital financing to the latter's downstream distributors within 24 hours - the first foreign bank to do so.

It is also DBS's first digital distributor financing linked to an anchor's digital supply chain platform.

The digital financing facility is part of DBS and Haier's regional efforts to support the liquidity needs of businesses, many of which are small and medium-sized enterprises (SMEs), during the Covid-19 pandemic.

The DBS financing facility enabled by the bank's application programming interfaces - or APIs, offers distributors online financing for their purchase orders in a day, acccessible by Haier's network of distributors via its digital supply chain platform. This helps distributors shorten their cash conversion cycle and optimise their working capital, said DBS.

In its first week of launch, DBS saw close to 30 distributors onboarded on the fully digital financing facility.

Additional capabilities include integrated online account opening and onboarding, and facial recognition and biometric features for enhanced security. The bank has also completed its first distributor financing request in March, where the distributor received the requested financing in under 30 minutes from the point of submission.

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John Laurens, group head of global transaction services at DBS Bank, said that providing financial sustenance to SMEs that form the commercial ecosystems of large corporates is crucial in this unprecedented global trade situation.

"The speed of financing gives businesses a fighting chance to tide through the downturn and emerge more resilient to ride the economic upturn when it returns," he added.

DBS is the only non-Chinese bank appointed by Haier for this digital financing facility. The other three participating banks are China Everbright, Bank of Shanghai and MYBank.

DBS had previously worked with large Chinese clients on digital supplier financing facilities. Earlier in September 2019, it launched its first multi-tier financing facility on a logistics blockchain platform named Rong-E Lian, developed in partnership with an undisclosed Chinese logistics player believed to be SF Group, according to industry sources.