"United Overseas Bank (UOB) is financing sustainable futures for Asia’s SMEs."

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In the Asia-Pacific region, 98% of businesses are small and medium-sized enterprises (SMEs) and employ 50% of the region’s total workforce¹. It contributes 17% of national GDP in India and 40%-50% in high income countries like Singapore and Malaysia¹. However, banks around the world consider SME financing as a risky investment². The SME Finance Forum identified a $300 billion funding gap in Southeast Asia³.

United Overseas Bank (UOB) consider financing as a key to SMEs’ operations and growth⁴. They serve over 274,000 SME clients across Asia⁴. UOB granted $45.3 billion in loans to SMEs in 2019, which was 9% higher than the previous year^5;p51, and it was 23% of their total customer loans^5;p25. On the other hand, their competitor DBS bank provided $27.2 billion in financing (10.2% of total customer loans^6;p141) for SMEs in the same year^7:p3. In 2019, UOB and DBS bank recorded $202 Bn (S$269 Bn^5;p25) and $268 Bn (S$357 Bn^6;p141) in total customer lending respectively.

Through UOB’s flagship collateral-free loan product, BizMoney, 2,800 SMEs in Singapore, Malaysia and Thailand got $547 million of working capital loans in 2019^5;p51. A grant of $40 million to Singapore Poultry Hub Pte Ltd helped the company to improve its productivity by 26% and production capacity by 70%, while reducing waste by 60 tonnes/day^5;p51. Also, UOB rolled out COVID relief measures and granted $2.1 billion in relief assistance for SMEs⁸.

As of April 2020, UOB has supported over a million businesses and individuals through loan moratorium and other relief measures⁸. The dedicated technology specialist team at UOB helped over 10,000 small businesses to set up additional revenue channels during the pandemic⁹. UOB also reached 31,000 SMEs across the Asian region with their BizSmart business solutions platform^5;p22.

To summarize, UOB is helping to address the SME funding gap issue and empowering small businesses. However, there is always enough scope remaining for further improvements.

Sources

• 1. https://www.smefinanceforum.org/post/the-role-of-smes-in-asias-economic-growth
• 2. https://www.entrepreneur.com/article/341931
• 3. https://www.wusme.org/sme-news/300-billion-funding-gap-for-smes-in-southeast-asia-is-critical-because-they-account-for-42-of-regions-gdp/
• 4. https://www.euromoney.com/article/b1lzgnlgpy67js/asias-best-bank-for-smes-2020-uob
• 5. https://www.uobgroup.com/investor-relations/assets/pdfs/investor/annual/UOB_Annual_Report_2019.pdf
• 6. https://www.dbs.com/annualreports/2019/files/media/dbs-annual-report-2019-p116-188.pdf
• 7. https://www.dbs.com/iwov-resources/images/sustainability/reporting/pdf/DBS%20Sustainability%20Report%202019%2020200306.pdf?pid=sg-group-pweb-sustainability-pdf-dbs-sustainability-report-2019
• 8. https://www.theasianbanker.com/updates-and-articles/uob-awarded-best-sme-bank-in-singapore-and-in-asia-pacific-at-the-international-excellence-in-retail-financial-services-awards-2020
• 9. https://www.businesstimes.com.sg/sme/smes-that-digitalised-in-2020-earned-more-have-better-2021-outlook-uob-study

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