Generally speaking, SMEs in Singapore provide employment for some 70 per cent of the local work force. Understanding how the Government can better support a thriving local private sector, as well as prepare it for disruptions brought about by technological advances could benefit SMEs tremendously.
Of the four points stated in the article, the balance between preventing the abuse of grants/schemes and the ease of application for said grants/schemes for SMEs, stood out. At present, SMEs are still required to go through rather lengthy forms to submit an application and can be tedious for micro SMEs. This is due to multiple reports of abuse of the Productivity and Innovation Credit (PIC) Scheme.
Following that, the Government will monitor schemes with take-up rates as the primary metric. Particularly, where financing and managing one’s company’s cash flows are key issues for SMEs, the Government aims to streamline the process of application. One can expect loans to be more accessible for SMEs, where loan sums involved are possibly too small for SMEs to qualify or even apply for.
In a special interview with former Singapore politician and entrepreneur advocate, Inderjit Singh, he talks about how the entrepreneurial ecosystem in Singapore is largely shaped by government policies, reforms, and regulations to better support such enterprises. Importantly, cost structures such as property rentals and land costs have to be rein in.
Singh shared his personal experience on how he formed a committee on my own to study the financing landscape in Singapore. He managed to rope in entrepreneurs, banks and even government representatives to be part of the committee. The Recommendation for Financing of SMEs was then published in 2002 after Singh and his team travelled widely in search of plausible methods of SME financing. The government got word of the published paper and asked for Singh to communicate these findings to them and thereafter accepted most, if not all of the recommendations stated in the paper. In the next 10 years, these suggestions were then implemented gradually to help growing SMEs go global.
Singh also spoke on how there may be a distortion in the kind of incentives offered by local government and non-government agencies. He believes that these agencies have their own KPIs and works exclusively in silos. While Singh argues that these funding opportunities is not entirely bad as it still largely drives the formation of more companies, Professor Wong Poh Kam offers a slightly different perspective. Singh and Wong are in agreement on one thing though. That funding goes into building gazelles, rather than zombie companies could propel Singapore’s entrepreneurial ecosystem forward.
See here for SME SPRING loans.