Ant digital bank expands in Singapore with small firm loans

Ant Group Co.’s Singapore digital wholesale bank will start offering loans to small and medium-sized businesses, as the Chinese fintech giant extends its reach in the city-state.

ANEXT Bank, which started its services in June, said it will give smaller companies loans starting from S$5,000 ($3,530), and as much as S$100,000 if clients chose a revolving credit line. Customers can also apply for ANEXT Bank’s loans via IN Financial Technologies and Bizmann System.

Ant is accelerating digital bank operations in Southeast Asia, replicating strategies in China that catapulted its fintech operations to becoming the country’s biggest. The move could help Ant diversify business and generate growth amid regulatory headwinds at home.

“We’re going to roll out our products progressively,” Toh Su Mei, chief executive of ANEXT Bank, told Bloomberg News, adding that the company is looking for more partners. “It’s really not about the number, but more about the value proposition.”

The Chinese firm will be facing stiff competition. It’s entering an arena dominated by traditional incumbents including DBS Group Holdings Ltd. and Oversea-Chinese Banking Corp.

Compared with credit offered by traditional banks, ANEXT Bank’s baseline loan product doesn’t require collateral. For credit of S$30,000 and below, no documents are needed. The interest rate will start from 6.8% per annum.

Ant was one of two groups to get a wholesale digital banking license in December 2020, allowing it to serve smaller firms and other non-retail segments. It required a capital commitment of S$100 million. That compares with a full digital bank license, which can serve all kinds of customers and eventually requires S$1.5 billion in capital as well as local control.

ANEXT Bank’s dual-currency deposit service went live in August. It takes US and Singapore dollars, and includes remote on-boarding and daily interest.

Ant also started offering a service known as Alipay+ D-store that allows businesses to build digital stores across platforms including Chope, AlipayHK and Touch ‘n Go. – BLOOMBERG