Blog

JAPANESE small and medium-sized enterprises (SMEs) can now receive financing support to expand into key Asian markets including Singapore, under a new partnership by DBS and Japan Finance Corporation (JFC), a Japanese financial institution.

Both corporations signed a memorandum of understanding (MOU) on Wednesday (Nov 27) to help Japanese SMEs expand into six markets in Asia – Singapore, China, Hong Kong, India, Indonesia and Taiwan – through a single banking partner, DBS.

Headquartered in Tokyo, JFC is a public corporation wholly owned by the Japanese government.

Under the partnership, Japanese SMEs can tap DBS’ local expertise across its six core markets in Asia, where the bank has a presence. Businesses will gain access to the lender’s suite of financial solutions such as digital cross-border payment capabilities and trade financing, as well as its ecosystem of professional services providers offering legal, accounting and human resource support.

To provide further support, JFC will extend standby letters of credit to Japanese SMEs to enable their local subsidiaries to secure long-term local currency-denominated funding. These letters of credit will act as guarantee and facilitate smooth access to funds through DBS.

“Together, this partnership holds the potential to enhance business connectivity between Japan and the rest of Asia, fostering a stronger presence for Japanese SMEs across the region,” said DBS in a press statement.

The partnership also builds on the bank’s commitment to Japan as a key market for innovation and growth, it added. In 1977, DBS established its first overseas branch in Tokyo; it later formed DBS Securities Japan in 2016 to expand its in-market offerings to securities.

Tan Su Shan, deputy chief executive officer and group head of institutional banking at DBS, said: “This MOU represents our commitment to helping Japanese SMEs regionalise and diversify by providing them with the financial and strategic support they need to grow across Asia with confidence.”

She cited a recent survey by the Japan External Trade Organization that highlighted eight Asian markets – China, India, Indonesia, Malaysia, Singapore, Taiwan, Thailand and Vietnam – as among the top destinations for Japanese businesses eyeing future growth.

With the new partnership, JFC has now established a “strong foundation” to support its customers’ financing in DBS’ six core markets, said Kenzo Yoneda, senior managing director and general manager of JFC’s SME unit.

“This will enable our customers to raise funds smoothly overseas and take advantage of DBS’ financial services and extensive overseas network,” he added.