E.Sun
Taiwan’s economy is built on small and medium-sized enterprises. More than 95% of the companies registered there are defined as SMEs. They can vary considerably in size and income, but the vast majority are family-owned. They are also E.Sun Bank’s primary focus under chief executive Joseph Huang.
With a determined effort to serve such a large sector, E.Sun is expanding its traditional business of lending while developing new innovative approaches to boost its market share. At the end of 2019, E.Sun had NT$365 billion ($12.2 billion) in SME loans, up 5.6% year on year; these account for 25.4% of its total NT$1.44 trillion loan portfolio, making this the largest segment.
The bank has invested heavily in technology to improve its products and services for SMEs, among which is an easy online loan application process for small enterprises. Within three minutes of using the online service, an applicant is told how much they can borrow and at what rate.
Behind the scenes is E.Sun’s risk modelling technology, created by its artificial intelligence team, which at the same time passes on the applicant’s information to the bank’s sales staff.
E.Sun recorded 2,000 online loan applications in 2019, resulting in NT$1.6 billion in lending, double that of the previous year. The bank’s average unsecured and secured SME loans are NT$20 million and NT$100 million, respectively. It has managed to grow while maintaining a low-risk approach, with a non-performing loan ratio of 0.3% for its SME loan portfolio.
The bank was able to increase its customer acquisition rate by 2.6 times last year by using a novel algorithm that predicts which corporate clients are likely to apply for loans in the coming year, creating precision marketing information for the bank’s sales team.
E.Sun also partnered with the government-backed Small and Medium Enterprise Credit Guarantee Fund of Taiwan on a number of SME initiatives, including its SME micro loan programme.
In corporate social responsibility, E.Sun Bank aims to be a green finance leader in Taiwan. In 2019, it announced a policy of prohibiting lending to coal power projects and companies, and it worked in leading positions on two syndicated loans for an offshore wind farm.
It has issued NT$5.9 billion ($197 million) in green bonds, or about 16% of the bank’s total bond issuance. It was the first Taiwanese financial institution to be included in the Dow Jones Sustainability indices.
E.Sun’ social contributions have largely come from its ‘Smile and hope’ loan scheme, launched in March 2019. The product is designed to help solve financial problems faced by social enterprises, shortening the loan application time from one month to 10 days. Since its launch, the programme has increased the number of eligible borrowers from 45 to 200 enterprises and lent a total of NT$26 million to 17 enterprises.
E.Sun also runs the Golden Seeds project, which aims to improve reading among primary school-aged children. The project is funded by income from the E.Sun World Card, a credit card with a charity function. The bank has built 150 local libraries since launching the project in 2008 and is committed to building a total of 200.