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Enterprise Singapore has partnered with Amsterdam-headquartered Credit Europe Bank to provide financing to Singaporean firms expanding overseas, with an initial focus on commodities and trade loans. 

Under the scheme, financing is provided by Credit Europe Bank and is backed by a guarantee of up to 50% from Enterprise Singapore (EnterpriseSG), a government agency that provides support to domestic businesses, the duo say in a joint announcement. 

Products include working capital facilities, trade loans and financing for overseas projects, as well as loans for purchasing equipment, machinery or land for construction. 

The risk-sharing agreement marks the first time the agency has partnered with a foreign financial institution. The scheme is also open to other financial institutions and multilateral development banks. 

“Financing is a key enabler critical for companies to scale and expand overseas, especially when venturing into new markets,” says Geoffrey Yeo, assistant managing director for capabilities, urban systems and solutions at EnterpriseSG.  

“We are pleased to work with Credit Europe Bank on this cross-border financing partnership. This is in line with EnterpriseSG’s push to help Singapore companies enter new markets to tap overseas opportunities.” 

The scheme will initially focus on trade and commodity finance before being expanded to other areas, the announcement says. 

“Trade and commodity finance is a core component of our business,” says Credit Europe Bank chief executive Senol Aloglu. 

“We are pleased and honoured to be the first international bank to establish a partnership with EnterpriseSG under the [scheme]. It aligns with our ambition to further diversify our customer base and to serve more customers in major global trade and commodity hubs.” 

Working capital loans carry a maximum value of S$300,000 and a maximum repayment period of five years, according to details published on EnterpriseSG’s website. 

Trade loans can total up to S$8mn with a maximum term of one year, while project loans are capped at S$50mn with a term of up to 15 years. 

In the case of default, the participating financial institution is expected to follow its standard commercial recovery procedure, including taking security, before it can make a claim with EnterpriseSG under the risk-sharing agreement. 

Update: EnterpriseSg announced on October 15 that the African Export-Import Bank (Afreximbank) has become the first multilateral development bank to join the risk-sharing scheme.

Yeo says the partnership “will enable Singapore businesses to leverage on Afreximbank’s financing solutions, extensive network and deep understanding of African markets”.

Haytham El Maayergi, executive vice-president, global trade bank at Afreximbank, says the move is expected to unlock trade and investment opportunities for Singapore companies looking to do business in Africa.

“Afreximbank represents a gateway to Africa to Singapore entities, providing access to tailored financing and de-risking solutions and leveraging our expertise, knowledge and goodwill of the African continent,” he says.

Singapore companies are also able to use Afreximbank’s Africa Trade Gateway to connect with financiers, investors and other partners active on the continent.

Trade between Singapore and Africa totalled S$16.3bn (US$12.5bn) last year, the announcement says.

This article was updated on October 15, 2024, following the announcement of Afreximbank’s participation in the scheme.