DBS Bank today announced its first multi-tier financing facility on a logistics blockchain platform named Rong-E Lian, to help small and medium-sized enterprises (SMEs) in China get faster access to trade financing.
Developed in partnership with a leading Chinese logistics player, Rong-E Lian offers multi-tier financing solutions to more than 1,000 of suppliers in the company’s supply chain ecosystem.
The multi-tier financing solution is particularly beneficial to suppliers 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.
Leveraging on DBS’ Application Programming Interface (APIs), the bank integrated its digital onboarding service into the blockchain platform, allowing DBS to verify the credentials of a supplier within seconds. Once credentials are verified, the bank is then able to offer digital trade financing services to upstream suppliers, often SMEs, in the ecosystem within 24 hours.
Neil Ge, CEO of DBS China, 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.”
DBS has successfully completed its first multi-tier financing transaction on the Rong-E Lian blockchain platform with suppliers in the China-based logistics supply chain ecosystem in August.
Prior to this DBS has also launched a blockchain trade financing platform for the automotive sector in China.
Featured image credit: DBS
