1 in 5 of OCBC’s home, renovation, and car loans now green

The Singapore bank has extended over S$3.5b of green loans in two years and targets a 10% growth in 2023.

Singapore has long set its sights on making the crown the world’s greenest city; and its citizens are more than willing to take on the challenge.

In the two years since launching its Eco-Care Loans, OCBC Bank said that it has extended over S$3.5b (US$2.64b). The loan series – available to retail clients looking to purchase a home, conduct renovations, or own a car – offers a range of benefits for those meeting certain green goals and criteria.

“The 2022 OCBC Climate Index Survey found that cost and inconvenience are two major considerations when it comes to consumer’s choices of whether to adopt or incorporate sustainability into their lifestyles,” Phang Lah Hwa, head of consumer-secured lending at OCBC Bank, told Asian Banking & Finance.

“By offering preferential rates, our Eco-Care loans provide consumers with the impetus to take concrete action by making their homes more environmentally friendly or switching to electric cars,” she said.

Green loans now account for one in every five home, renovation, and car loans that OCBC extended from March 2021 to March 2023.

Compared to a regular loan customer, the OCBC offers our Eco-Care loan customers preferential rates and extra benefits. For instance, Eco-Care home and renovation loan customers can enjoy a one-time S$88 (US$66) bill rebate when they apply for Senoko’s LifeGreen24 plan, shared Phang Lah Hwa, head, consumer secured lending, OCBC Bank.

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Green cars
One major target that Singapore highlighted in its bid to become greener is to encourage take up of electric vehicles or EVs.

In its Green Plan 2030, Singapore outlined plans for all new car and taxi registrations to be of cleaner-energy models from 2030; and floated plans to build 60,000 charging points island-wide by the same year, 40,000 of which are in public car parks and 20,000 in private premises.

For its part, OCBC now offers green loans for would-be car owners to encourage them to take up the use of electric vehicles. “We partnered [with] Charge+ to offer Eco-Care car loan customers with three months of free charging credits, and it can be used at more than 700 Charge+ charging points across Singapore,” Phang said.

Loan customers staying in landed property can even opt for a complimentary home charging station to be installed at their house instead/

No greenwashing here
To ensure that homeowners are eligible for OCBCs Eco-Care Home and Renovation loans, they must first pass the Building and Construction Authority’s Tropical Home Energy Efficiency Assessment (THEEA). As of writing, OCBC said that it is the only bank that utilises THEEA as a prerequisite to apply for a home or renovation loan in Singapore.

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THEEA measures homeowners’ intention to adopt greener alternatives across three categories. First is home design, such as the use of solar window film, for example. The second involves the home’s installation of energy-efficient appliances, which equates to those with at least three or four ticks for energy efficiency, said Phang.

The third criteria is whether or not the home has smart home features that regulate energy consumption, such as a smart thermostat for control of the air conditioner.
In the future, OCBC aims to target an almost 10% year-on-year growth in its Eco-Care Loans over the next 12 months up to March 2024. This is despite taking into account the inflation as well as expectations of a housing market slowdown in 2023.

“Driving the transition to a sustainable low-carbon world is a core pillar of OCBC Bank’s corporate strategy to drive growth,” Phang stressed. “Products such as the OCBC Eco-Care Loans are one of the ways that we are delivering value to our consumers while simultaneously contributing to the sustainability movement.

Outside of the Eco-Care Loans, OCBC has also been taking steps to push the green agenda. Phang said they have achieved S$44b (US$33b) in sustainable finance commitments as part of their five-year climate strategy, and are on track to achieving their target of S$50b (US$37.7b) by 2050.

The bank is also a signatory to the United Nations-convened Net Zero Banking alliance.

It has also launched two environment-related studies: The OCBC Climate Index, an annual study that measures Singaporeans’ level of environmental sustainability awareness and climate action, providing valuable insights into consumer behavior; and an electric vehicle adoption study, which was launched in 2022 with the National University of Singapore. The latter study is currently underway.