UOB widens sustainable financing access for SMEs

The bank applies a differentiated assessment model.

United Overseas Bank (UOB) has incorporated the Singapore-Asia Taxonomy (SAT) into its sustainable financing frameworks, reportedly enabling small and medium enterprises (SMEs) in sectoral value chains to gain easier access to sustainable financing.

UOB said that it is the only bank in Singapore to incorporate the Monetary Authority of Singapore’s (MAS) technical screening criteria (TSCs) of SAT into all six of its sector-focused sustainable financing frameworks.

The six frameworks are Circular Economy, Green Buildings, Sustainable Cities, Sustainable Food and Agribusiness, Sustainable Trade, and Transition Finance.

To ensure that its sustainable financing remains accessible, UOB’s frameworks now include SMEs.

The bank said that it also applies a differentiated assessment model. Entities directly involved in the economic activities, such as project owners and main contractors, that are seeking financing above a specific threshold will need to provide evidence of their compliance with specific criteria.

Meanwhile, other entities, such as those assessed with lower risk profiles, will follow an attestation-based approach with mandatory representations and warranties.

The bank is also expanding transition finance for a just and orderly transition in the oil, gas and chemicals sector, with defined sunset dates established.

This reportedly gives companies the time and support needed to pivot their business models, enhance operational efficiencies, and shift towards lower-carbon solutions, UOB said.