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UOB applies AI to transactional data to speed up loan approvals for SMEs

United Overseas Bank is to run small business trading data from companies transacting over B2B e-commerce platform OctoRocket through an AI-based credit assessment tool to speed up the loan approval process.

OctoRocket, a joint venture launched in January by Singapore Press Holdings (SPH) and Y3 Technologies, enables cross-border trade between suppliers and buyers from Singapore, Indonesia, Malaysia, Thailand and Vietnam.

Under the agreement, UOB will enable small businesses that use OctoRocket for at least six months to apply for financing directly via the online platform. Instead of relying on the company’s financial statements, the bank will assess the applicant’s creditworthiness based on its transactional data on OctoRocket, using a credit assessment engine developed by Avatec.ai, gaining insights into the applicant’s cashflow and day-to-day operations.

Avatec.ai is a joint venture by UOB and Pintec Technology that was established in April last year.

Typically, small businesses need to submit two years’ worth of financial statements and six months’ worth of bank statements when applying for financing. UOB says the new system will enable it to cut the time taken for loan approvals from an average of 2.5 days to just 15 minutes. In addition, small businesses no longer need to wait two years before being eligible for a loan.

Lawrence Loh, head of group business banking, UOB, says: “Small businesses, which comprise nearly 99 per cent of total enterprises in ASEAN, form the backbone of the region’s economy. Through our AI-driven credit assessment engine which analyses traditional and alternative sets of data to assess a business’ creditworthiness faster and more accurately, businesses on OctoRocket will enjoy faster loan approvals. This will benefit e-commerce buyers and sellers who may need the credit to seize business opportunities quickly as they arise.”

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