The latest drive came from DBS Bank, Singapore's biggest lender which launched a green renovation loan last weekend for property owners looking for more eco-friendly home solutions such as switching to green electricity retailers or installing green energy sources like solar panels.
The bank provided a checklist of requirements for getting the loan on its website.
Another green loan package already available in the local market is for customers looking to buy electric or hybrid cars. Advantages of the green loan packages include lower borrowing cost. The green renovation loan of DBS, for instance, comes with an annual interest rate of 2.68 percent, while the average market rate of normal home renovation loans is 3.88 percent.
In order to entice more customers to take up green loans, Singapore banks partner with locally-based energy and electric vehicle companies to roll out rebates for any installation of green energy infrastructure and related services.
The banks' move to drive green loans comes after Singapore's government has announced the Singapore Green Plan 2030 this year, which is its roadmap towards sustainable development and net-zero emissions.
Prime Minister Lee Hsien Loong said last week that the city-state as a financial hub can help in the global push for sustainability through various efforts, in particular green finance.
As players in one of the major pillar sectors of the Singapore economy, local financial institutions inevitably have to play a major role in promoting green finance. Their efforts not only aim to fulfill the roadmap laid out by the government, but also serve to raise the awareness of environmental challenges amid climate change in the local community.
However, the likely changes of business landscape in the post-pandemic phase also weighed on local banks' decision to promote green finance. While it is yet to be fully known what the post-pandemic economy will look like, Singapore banks are clearly aware that they cannot sit still to wait for the moment to come.
For one, there will be more players in the local financial sector even if the pandemic persists until next year or beyond. The Monetary Authority of Singapore (MAS) had last December granted digital banking licenses to two local consortiums and two Chinese mainland consortiums which will commence operations from early next year. The new players will likely bring increased competition to the already crowded banking sector in the city-state.
By launching various green loan packages ahead of the more competitive business landscape, Singapore banks hope to leverage their existing customer bases early in order to stave off any stiff competitions in future.
In fact, they are poised to introduce more innovative green finance solutions to meet the increasing needs of businesses too. Green innovation loan may perhaps be an indicator of something more exciting to come. - Xinhua