Oversea-Chinese Banking Corporation (OCBC) has unveiled a $5 billion target to support small- and medium-sized enterprises (SME) within its core markets of Singapore, Malaysia, Hong Kong and Indonesia through loans by 2028.
The financing will be available for what the bank terms “serial entrepreneurs”, that is, business owners who own and operate multiple companies instead of focusing on growing a single venture.
These include various businesses that are diversified in industries, within the same value chain or which have similar service or product offerings.
Individual companies may have an average of $1 million to $5 million in gross sales turnover, while the total value of the businesses put together could range between $5 million to $30 million in group revenue.
OCBC began its foray into serving the sector by first conducting over 500 surveys between 2017 and 2018 to highlight the numerous pain points of early-stage businesses.
These include the lack of recognition that small business owners experience, having to pitch the same story to multiple bank staff, as well as low limits for funding despite having a reputable track record.
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Anna Chang, OCBC's head of middle market and services, global commercial banking, says: “Across multiple companies, they [serial entrepreneurs] are underappreciated for their business track record and this is common across their experiences with commercial banks. Critically, each of the companies is treated by commercial banks on a standalone basis, so when they have multiple companies, it’s a very fragmented experience.”
Reviewing the survey data, the bank recognised the potential to serve this growing archetype of customers, noting that one in every three new companies was founded by entrepreneurs with existing companies and one-third of OCBC portfolios in SMEs were owned by serial entrepreneurs.
OCBC also saw a propensity for these businesses to scale rapidly within the first few years of development.
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According to the bank, one in five entrepreneurs set up a second company a year after establishing their first while the majority of entrepreneurs set up a second company three years after their first.
“When we heard the frustrations, we redesigned and reshaped the SME banking model to wrap around the key man in terms of how they start the venture, and how they build, operate and scale,” says Chang.
OCBC designed the tailored programme to appraise entrepreneurs not merely as operators of businesses, but as enterprise-builders. Rather than evaluating each venture in isolation, the bank aggregates the entrepreneur’s portfolio and extends financing based on the collective strength of their holdings.
Each client is paired with a dedicated relationship manager, who, with the assistance of a network of in-house experts, can advise on cash management, corporate advisory and wealth services.
Serial entrepreneurs are even able to receive loans before their business’s profitability.
First launched in Singapore in 2019, OCBC expanded the offering into Malaysia in July after a nine-month pilot.
By the end of 2024, over 1,800 serial entrepreneurs and over 8,000 companies across Singapore and Malaysia had been given over $1.5 billion in growth financing.
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With this, the bank has set in place plans to roll out similar offerings to Hong Kong in 2H2025 and subsequently to Indonesia.
From 2025 to 2028, OCBC will extend $3.5 billion in financing across Singapore, Malaysia, Hong Kong and Indonesia.
Chang adds that in terms of credit performance, serial entrepreneurs “tend to have” lower default rates at 30% lower when compared to entrepreneurs with a single company.
She notes: “From the bank’s perspective, it allows us to see the interdependencies that might have been missed if we were financing or underwriting on a per company basis. But because we're doing cross-company referencing for relationships and performance, many times that allows us to spot red flags earlier and mitigate through having conversations with these serial entrepreneurs.”
“I think it's not just about loans. I think it's really about the ambition that we are here for,” says Chang.
Shares in OCBC closed nine cents higher, or 0.55% up, at $16.57 on July 7.
