SINGAPORE: Almost half of Singapore’s small and medium-sized enterprises expect revenue growth to be driven by overseas expansion, and many seek to overcome challenges in meeting their regional financing needs, according to the inaugural “SME Growth and Financing Survey” by the Singapore Business Federation and Standard Chartered Bank.
The survey polled more than 300 SME executives on their outlook for growth, business aspirations and financing needs to expand abroad.
About 45 per cent of respondents expect an increase in revenue this year, with almost 60 per cent saying more business activities outside of Singapore will drive growth.
This suggests a shift towards efforts to expand the consumer base as SMEs explore neighbouring economies for opportunities.
More than 40 per cent are inclined to expand their activities in these economies to take advantage of their proximity to available resources and large domestic markets.
Executives plan to seek new consumer segments (19 per cent) and strive for greater market adaptability (17 per cent) to boost growth.
Respondents face challenges in spreading their footprint overseas, with seven in 10 saying access to funds without a proven track record in the host country is difficult.
Most believe that their existing banking partners do not have the capabilities to establish relationships with banks in the host country (56 per cent), find the right overseas partners (55 per cent) or understand foreign markets (58 per cent).
SMEs’ limited access to in-country funds and expertise is seen as an impediment to their overseas expansion plans.
Vanessa Leung, head of commercial banking at Standard Chartered Bank in Singapore, said yesterday that when venturing overseas, SMEs’ lack of a proven track record in a foreign country often made access to banking facilities and funding difficult.
It is critical for SMEs to find the right banking partner that can support their growth strategy.
A bank that understands the SME in its home market and also has a strong regional presence will be able to provide a holistic approach to the SME’s financing needs across geographies.
It can also offer deep local insights into foreign markets.
Such banks would typically have cross-border solutions that enable SMEs to maintain full control of all their banking transactions and financing needs from their home market.
While 63 per cent have heard of the Asean Economic Community and 58 per cent the Trans-Pacific Partnership, few are aware of what these agreements or collaborations are about or what they aim to achieve.
At least four in 10 respondents also do not know if these regional initiatives will have an impact on their business growth – 47 per cent for the AEC and 43 per cent for the TPP.
