Connecting SMEs for growth


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When it comes to operating as a small and medium-sized enterprise (SME) today, the landscape is an extremely challenging one due to the everchanging business landscape.

After weathering the crisis of a generation in the form of a global pandemic, many SMEs now have to grapple with new challenges arising from geopolitical tensions, elevated inflation, slowing global growth, and technological disruption.

It is little wonder that ensuring cash flow and managing costs are top priorities for SMEs, according to DBS' SME Pulse Check 2023 survey.

At the same time, SMEs are facing a manpower crunch as the Singapore labour market continues to tighten.

But while the short-term concerns may weigh heavily, many SMEs are also thinking about the long term. About half of local SMEs are optimistic about their growth prospects for 2023 (49%), while more than six in 10 SMEs said that first-time overseas expansion and entering new markets are key business priorities.

The opportunities are tremendous, with digitalisation and artificial intelligence (AI) likely to unleash a wave of productivity for both larger enterprises and smaller companies.

Balancing the short-term challenges with a view to riding long-term opportunities will require SMEs to focus on three key advantages: enlisting ecosystem partners, embarking on regionalisation and adopting industry best practices.

Partnering with the big boys to offer solutions

Scale is critical in the digital economy but being small has its advantages: being quick, adaptable and resilient. The key is ensuring that a company’s strengths are complemented by the advantages scale brings.

One way of doing this is to partner with strong partners. 

Take digitalisation as an example. It is not easy for small or micro enterprises to start the process of digitalising their workflows. This is why DBS has been working to link SMEs up with technology platforms to accelerate the process.

For instance, DBS and GS1 Hong Kong launched a digital and streamlined trade financing solution in 2022. This paperless solution means SMEs on GS1 Hong Kong’s ezTRADE platform can access funding more quickly, and with less hassle. 

Meanwhile, the DBS Start Digital Programme offers SMEs a gateway to a suite of digital solutions. It allows them to tap the services of bigger partners in areas ranging from accounting and digital marketing to digital transactions and cybersecurity. 

Among the software providers for this programme are Financio, a cloud accounting software; Talenox, an HR solution managing payroll and leave; and Momentum Z, a cybersecurity and compliance specialist.

The Start Digital Programme is one of several initiatives under DBS BusinessClass, an engagement platform launched in 2016 to help SMEs transform digitally, embark on sustainability, and reach out to like-minded peers.

Other offerings under the DBS BusinessClass umbrella are exclusive Skills Booster and #Cyberwellness programmes, networking and sustainability events, academy workshops, as well as a monthly newsletter with curated insights. 

An expanded network of services in Asia    

Another crucial area for SMEs is in overseas expansion, especially in Asia, which remains the engine of global growth. The region is set to contribute 70% of global growth in 2023, according to the International Monetary Fund.

SMEs looking to break into new markets can tap on DBS’ network of services in the region. The bank has been widening its footprint in six core markets: India, China, Hong Kong, Taiwan, Indonesia, and Singapore. 

In India, the amalgamation of DBS with Lakshmi Vilas Bank has helped scale up its algorithmic-based lending and online account opening service capabilities. DBS has grown its presence in the country from 28 to 100 locations.

Over in China, DBS’ strategic expansion in the Greater Bay Area accelerated in 2021 after it acquired a 13 per cent stake in Shenzhen Rural Commercial Bank (SZRCB). The expansion supports digital transformation in the region, offering banking solutions that can help SMEs finance growth, manage risk and transact in a more effective way.

PT Bank DBS Indonesia also worked with SMEs and start-ups to speed up the growth of the digital economy sector. They can tap into the bank’s array of digital economy group products and services – such as advisory services and structured loan solutions – across markets.

Strength in numbers

SMEs have always thrived when operating in a larger network of companies. 

While limited on their own, they can leverage peers to build networks, expand markets, and pick up best practices. 

Academic studies have shown that having a strong network can help SMEs obtain new opportunities, boost innovation, and grow faster.

DBS BusinessClass provides SMEs with many such opportunities. One recent event was Disrupt series – The Future of Sustainability event where industry leaders, experts and enterprises discussed the challenges and opportunities for SMEs as they transition to a greener future.

DBS has also been partnering community and trade associations in the region, such as The Federation of Merchants’ Associations, Singapore; Hong Kong General Chamber of Young Entrepreneurs; and the Confederation of Indian Industry. SMEs in these networks get the chance to connect with each other – and with DBS partners – through workshops on digital solutions and other events.

Koh Kar Siong, Group Head of SME Banking, DBS Bank said, “Speed, scale, and skills are crucial to a successful business. SMEs may have limited resources, but they can become more resilient by connecting with like-minded partners in the ecosystem and leveraging their expertise. DBS is pleased to be able to provide an extensive network of solutions and programmes that make these vital connections possible.” 

It’s not easy being an SME today, given the challenges of the business landscape. But by working with strong partners and tapping on the power of networks, size is no longer an impediment to chasing big dreams.

Stay updated with latest industry trends and insights and gain access to exclusive event invitations by subscribing to DBS BusinessClass here.