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How Xero and DBS are digitalising small business lending in Asia

Posted 3 weeks ago in Advisors by Koren Wines
Posted by Koren Wines

Ask any small business owner what the key to running a smooth operation is, and chances are, they’ll all tell you the same thing –  positive cash flow. But when contending with pressures like late payments, rising expenses and seasonal slowdowns, many need extra support to stay out of the red. This is where safe and secure borrowing becomes a lifeline. However, traditional loan applications weren’t designed with small businesses in mind – something Xero and DBS Bank have set out to change. 

Earlier in 2022, we deepened our partnership with Asia’s leading financial services group. Why? To simplify the loan application process and make it easier for small businesses to access working capital with hyper-personalised lending solutions. Because as we face continued economic turbulence, it’s never been more important to ensure small businesses have the support they need to succeed.

Breaking down barriers to financial support

Xero joined forces with DBS back in 2017 to create a bank feed integration, giving small businesses in Singapore and Hong Kong greater visibility and control over their finances with automatic bank updates. This year, we’ve taken things a step further. 

Xero customers can now leverage direct bank feeds by opting into securely sharing their transactional records with DBS. This gives the bank a more holistic snapshot of a small business’s cash flow, enabling them to offer tailored lending options, like personalised credit terms and working capital limits. 

The bank’s Group Head of SME Banking, Joyce Tee, explains, “DBS has been sharpening our digital lending capabilities by leveraging ecosystem partnerships and advanced data analytics to roll out solutions that are hyper-personalised to each business.” Gone are the days of complex and slow loan applications; data-driven, intuitive and integrated processes are the way forward. 

Supporting a stronger small business economy

Despite tentative signs of economic recovery, business owners are looking to shore up their balance sheets as they brace for increasing pressures (like rising costs of living). In these uncertain times, taking a proactive approach to mitigate financial risk is a smart move – as we’ve learned from recent years.

In fact, DBS helped tens of thousands of business owners access critical support when they needed it most throughout the pandemic. Since 2020, they’ve approved over 14,000 collateral-free loans, 90 percent of which went to micro and small enterprises. This contributed over S$6.4 billion to Singapore’s economy, all while helping loan recipients maintain consistent cash flow and manage expenses – which 85 percent of small businesses named as critical priorities this year, according to DBS research

Xero’s collaboration with DBS  signals that the future of lending is digital. Together, we look forward to continuing to help small business owners with their financing needs, particularly in ensuring they have the right support to thrive through the years ahead. 

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