DBS Bank has launched a supplier financing programme with retail group Dairy Farm Singapore and, according to the bank, it is the first of its kind for the retail industry in the country. Dairy Farm operates more than 800 retail stores in Singapore under the 7-Eleven, Cold Storage, Giant (hypermarket), Guardian Health and Beauty, Market Place and Shop N Save (supermarkets) brand names.
“DBS recognises the growing trend of supply chain financing in the market and the need for innovative working capital solutions that could strengthen the supply chain relationships between our valuable corporate customers and their suppliers,” said Vijay Vashist, managing director of global transaction services at DBS. “Our programme, jointly developed with Diary Farm, is exciting and unique in both its scope, and depth of positive impact it will have for their thousands of suppliers.”
The supplier financing programme is essentially a working capital solution which will help deliver efficiencies in the end-to-end process of the supplier-to-buyer operating model. Together, DBS and Diary Farm have customised a programme that provides financial benefits to the latter’s suppliers and delivers a more efficient and secure process to support the supply chain. The new programme will add another product to the bank’s portfolio to support its customers by increasing cashflow and reducing operational expenses.
According to Vashist, DBS aims to grow the trade and supply chain segment of its global transaction services business aggressively across Asia. The bank is in the process of launching similar supply chain financing programmes in China, Hong Kong, India, Indonesia and Taiwan. Vashist believes the success of the programme with Dairy Farm in Singapore will set the stage for DBS to broaden the scope of their partnership in other markets.
“Supply chain financing is a strategic initiative that DBS has developed over the last 12 months to tap into the unique competitive advantage of the bank: our established client base of over 100,000 customers ranging from large MNCs (multinational corporations) to local SMEs (small and medium sized enterprises) provides a huge opportunity for us to expand distribution of this new programme in the immediate future,” said Tom McCabe, group head of GTS at DBS. “Intra-Asia trade is now growing at nearly six times the rate of trade between Asia’s traditional partners of the US and Europe.”
