Preparing For Future Challenges
SMEs should take advantage of Budget measures to deepen their capabilities and reach out to partners for assistance.
Author: Joyce Tee, Managing Director and Group Head, DBS SME Banking
Many have described this year's Budget as an underwhelming one for the business community. There was no "silver bullet" or big bang measures to help firms with deal with the challenges they are facing on multiple fronts.
Instead, the Budget reinforced the recommended strategies in the Committee on the Future Economy's (CFE) report. The recommendations, which have been accepted in its entirety by the Government, provide a broad direction for Singapore's economy in the face of a fast-changing global environment.
On the whole, it was a fiscally cautious attempt to balance the country's social and economic concerns over the medium and long term. Like others, I would have liked to have seen more initiatives aimed at helping companies, and in particular SMEs, with the problems they are facing right now.
Even as we talk about building capabilities for the future economy, many of our SME and even social enterprise customers are struggling just to make ends meet on a daily basis. Unfortunately, Budget measures to help these enterprises tackle immediate issues, such as high rental costs and the tight supply of labour, was in short supply.
For instance, a larger loan quantum under the SME Working Capital Loan scheme would have been helpful. When the SME Working Capital Loan scheme was launched last year, we received an overwhelming response. Since then, we have granted over SGD 300 million worth of loans to more than 2,000 SMEs.
Many SMEs have used this loan to explore new business opportunities, upgrade their capabilities and innovate. Companies from the building and construction, food and beverage, as well as retail sectors have benefited the most from this new loan scheme.
What was encouraging to see, however, was an increased focus on SMEs in both the CFE report and Budget. This recognises the important role that local businesses will play in the economy's long-term growth.
Moving in the right direction
Yet, I believe the overall thrust of the CFE recommendations and the Budget is the right one for Singapore; and very much aligned with what we are already doing to help SMEs at DBS.
The end goal of many of these measures is to help Singapore enterprises develop solutions that are exportable to the rest of the world. In a fast-changing world marked by disruption, this requires local firms to have a better understanding of their target markets abroad, and develop the ability to adapt quickly to changing circumstances.
To do so, SMEs will need to collaborate with Government agencies, large corporates and fellow enterprises; leveraging their expertise in order gain insights on the opportunities available globally and how to capture them. On this front, the CFE and this year's Budget have highlighted collaboration as one of the key strategies for success going forward.
In recent years, DBS has ramped up its efforts to help SMEs connect with partners that can help them overcome their challenges and grow their businesses. Our BusinessClass platform, for instance, offers business owners access to networks of experienced entrepreneurs and mentors through a digital app as well as targeted industry events.
DBS is also a participating financial institution in IE Singapore's Internationalisation Finance Scheme, which offers Singapore firms loans of up to SGD 30 million to fund their overseas expansion. The scheme was enhanced at this year's Budget to further support such efforts.
The adoption of digital technologies was another key element of the Budget to help strengthen business capabilities. One scheme announced was the SMEs Go Digital Programme, which offers companies technical advice and funding support to help them digitise their operations.
This increased focus on technology is important for the sustainability of our economy, as more business is being conducted online. In this regard, DBS has been actively helping our SME customers adopt digital technologies in recent years.
For instance, our Techmatch programme pairs local SMEs with technology firms globally that are able to develop digital solutions to help these firms overcome their problems. Participating SMEs have been able to implement solutions in just months, and at a fraction of the cost of developing their own from scratch.
Overall, this year's Budget was a balanced one designed to help Singapore companies and their workers developed the necessary capabilities to compete in a new world order. Despite the lack of immediate assistance, SMEs should not lose heart, but rather take the opportunity to reach out to like-minded partners in the private and public sectors to help them on their journey of growth.
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