Here comes yet another digital bank, Maribank stepping into the scene officially in July. We're thrilled to witness a new player in the SME lending game, joining the ranks of ANEXT and Greenlink. Better late than never, right?
MariBank is a digital banking entity wholly owned by Sea Limited and authorized by the Monetary Authority of Singapore (MAS). Through the MariBank mobile application, customers can effortlessly oversee both personal and business banking, consolidating financial management into one user-friendly platform.
It's been three months since their launch, and its just about time for us to dive (get it?) into an initial review of their SME loan product, the Mari Business Loan.
Here are some of the features of Mari Business Loan:
Interest at 0.5% flat per month (equals an 8.98% annual rate effective). Not the absolute cheapest. Traditional banks can still offer working capital loans at an effective rate of 8.25% p.a. Also to note, the effective Interest Rate is determined based on a 3-month loan tenure, so their effective rates are higher for loan tenures extending to 12 months. In comparison, ANEXT maintains an 8.8% p.a. effective rate for a 5-year tenure. Therefore, despite the absence of administrative fees, the overall cost remains higher.
One thing good is that their interest calculation is based on a simple interest basis, making it relatively straightforward to compute. For instance, with a Mari Business Loan charging a simple interest of 0.5% per month on the borrowed amount, a loan of S$100,000 incurs a monthly interest of S$500. With a repayment plan spanning 9 months, the total interest amounts to S$4,500.
Repay over 3, 6, 9, or 12 months with no prepayment fees. This feature is excellent for borrowers looking to make early repayments to reduce interest costs, unlike banks that charge up to 1.5%. However, due to the initial short tenure of 12 months, I don't consider this to be much of a significant advantage as most people would not pay early.
Please note that this is still not a revolving credit, more like a regular loan given as a standby line and they'll give you a side-eye if you're late – 15% late charge alert!
Similar to ANEXT, if the loan amount is below $30,000, there's no need for documentation. This streamlined process enables easier access to smaller loans for small and medium-sized enterprises or hawkers predominantly dealing in cash without readily available bank statements.
For these borrowers, providing documents such as CPF, NOA, and a robust credit score becomes crucial, as their bank statements aren't evaluated. However, a few challenges arise with Maribank's system. They lack a web-based application, requiring borrowers to download their app to kickstart the loan application process. This has raised concerns among some customers due to recent scam cases associated with app downloads.
Nevertheless, the application's user interface appears fairly user-friendly. It's important to note that currently, Maribank only accommodates single directors and sole proprietors. They do not extend support to multiple directors or complex business structures at present.
Additionally, for Shopee businesses, there's an option to link your account to the Mari Business application, providing added credibility to your business profile.
Been in biz for at least 6 months? Got at least 51% ownership as a Singaporean or PR? Then you qualify! Do note that only Single Directors and Sole proprietors are accepted for now. :(
Mari Bank suits small-time hustlers who don't play the big bank game. For the bigger players, it might not be the game-changer due to limited support, short loan terms, and fees that aren't super competitive. Rating for now? 7/10. But who knows, they might amp things up in the market soon. Stay tuned for the next episode in 6 months!
Disclaimer: Fun review, but keep in mind, things in the financial world can change faster than your morning coffee brew!
Just snag the MariBank app, select your loan, and let the good times roll – applications are processed pronto, usually within a day or two. Cheers to smoother biz sailing! 🚀✨
Benjamin heads up Lendingpot with a background in all things SME. He was previously a commercial banker at Citi with experience in Relationship management, Credit Risk, Trade Operations and Corporate FX sales; and understands the difficulties SMEs face in this opaque world of SME financing.