CASE STUDY: OCBC ECO-CARE LOAN One in five of OCBC’s home, renovation, and car loans are now green

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 Lah Hwa.

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

Our Eco-Care loans provide consumers with the impetus to take concrete action by making their homes more environmentally friendly 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,” Lah Hwa stated.

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.

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 Lah Hwa.

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.