POSB, in collaboration with Tote Board and SE Hub Ltd, today announces a pilot programme, the MicroCredit Business Scheme (MCBS), designed to provide business loan to low income individuals. Aligned with the three organisations’ common aspiration to improve lives within the community, the Scheme is expected to help Singaporeans become more self-reliant by starting up or expanding their micro-businesses.
By engaging the support of Tote Board, SE Hub, selected Voluntary Welfare Organisations (VWOs) and Self-Help Groups (SHGs), POSB is able to apply a different set of lending criteria to the micro loan. Singaporeans who were previously unable to obtain a loan through other mainstream channels can now get an unsecured loan of $5,000 to $50,000 through the MCBS. The applicant has to be a Singapore citizen, at least 18 years old and earn less than $30,000 per annum to be eligible for the loan.
This initiative will start off with a $5 million seed funding from Tote Board. Funds collected from loan repayments will be injected back into the Scheme to help new loan applicants. The MCBS will be managed by MCBS Programme Office, which resides in SE Hub. The Scheme will be overseen by a Loan Management Committee with representatives from POSB, Tote Board, SE Hub and other private or public sectors. The committee will decide on the loan amount, disbursement and tenure based on the evaluation of the applicant’s business plan and credit information.
Koh Kar Siong, Managing Director and Head of POSB, said: “As the people’s bank, POSB serves over 4 million customers, many of whom have banked with us since they were young. The MicroCredit Business Scheme helps a segment of them to fulfill their business aspirations by providing them with access to funds and banking services that are suitable for their needs. We are pleased that Tote Board, SE Hub and the various VWOs are lending us their support in improving the lives of Singaporeans.”
As the loan administrator, POSB will provide support on the loan structuring of MCBS and facilitate the flow of the funds, including loan disbursements and repayments.
“This flexible scheme is designed to encourage discipline and self-sustenance whether it is for short term business initiatives such as selling pastries during festive periods or to fulfill a longer term business plan such as starting a retail shop”, Koh added.
As part of the application, applicants will have to provide a business plan. Once successful, applicants will attend a complimentary training programme, on the basics of business financial management such as cash flow, record keeping skills, concept of loan and saving. During the loan tenure, MCBS loan facilitation officers will help to ensure timely repayments and provide other assistance to the applicant. MCBS Programme Office will also facilitate networking sessions to encourage the sharing of experiences amongst the loan applicants.
Kuo How Nam, Chairman of the loan management committee, SE Hub, said: “In collaboration with POSB, we are delighted to see the crystallisation of the MicroCredit Business Scheme, which is envisaged to meet the objective of assisting low-income or unemployed Singaporeans with financing to start their business which would otherwise be unobtainable from traditional banking sources. We hope that MCBS will be well received and will prove to be a viable self sustaining initiative.”
The MCBS will commence on 18 November, 2011. Interested applicants can obtain the application form from any POSB branches, the MCBS Programme Office at Singapore Polytechnic or download it from the MCBS website at http://www.mcbs.com.sg from 18 November, 2011 onwards. They can also seek help from the participating VWOs or SHGs regarding the Scheme.
A part of the DBS Group, POSB is the largest local bank in Singapore with 4 million customers. Having served generations of Singaporeans for the past 134 years, it is known as the "People's Bank", and prides itself in being "neighbours first, bankers second".
With a good understanding of Singaporeans through the years, POSB offers products and services that are relevant to the savings, borrowing, investment and insurance needs of all Singaporeans. With 51 branches conveniently located islandwide, and over 1,300 ATMs and Cash Acceptance Machines across the island, POSB's distribution network is the largest in Singapore.
POSB acknowledges the passion, commitment and can-do spirit in each of its staff. For more information, please visit www.posb.com.sg.
About Tote Board
Established on 1 January 1988, the Singapore Totalisator Board (“Tote Board”) holds the legal right to operate various gaming activities through its agents, Singapore Turf Club and Singapore Pools (Pte) Ltd. Tote Board also manages its funding activities from the surpluses generated from these operations, and the casino entry levies.
Its Vision is to be a leading grant-making organisation that channels gaming revenues to give hope to and improve lives in our community.
About SE Hub Ltd
SE Hub was established in March 2011 to invest in and incubate social enterprises. These are commercial businesses with a mission to solve social issues or create social value. They should have the potential to be financially sustainable and be of significant social impact. SE Hub does not seek to maximise financial returns from its investments, but will balance financial returns with the social benefits generated by the investee companies.
Start-up companies will be offered fully serviced facilities in SE Hub's Incubation Centre located in the Singapore Polytechnic, and provided management support and mentoring by a panel of industry senior executives. The investment funding and mentoring support will assist social enterprises to grow successfully, benefiting society or the environment on a continuing basis. SE Hub is itself a social enterprise, in that all proceeds and profits from its investments will be ploughed back for investment into more social enterprises. SE Hub is supported by the Tote Board. For more information, please visit http://www.sehub.com.sg.