The forthcoming Singapore Budget of 2019 is set to bring some good news for the SMEs. Yes, the Singapore Government is planning to offer more help to their SMEs so that they could gain advantage from the policy assistance schemes and also help the businesses entering the Asean region, as per a report from DBS.
Irvin Seah, who is the DBS senior economist and has also authored the report, was of the view that there are some guidelines and policy measures that look like being “skewed in favour of bigger companies”. An example of this could be the schemes like the SME Working Capital Loan, which is being facilitated through various financial institutions (PFIs) which are participating, but the inclination for these PFIs are titled towards big businesses who have a sounder financial position.
Irvin Seah also mentioned that in spite of the fact that the government provides some risk coverage, the consequence is that small-size enterprises who require more financing assistance might not get the required assistance irrespective of their creative business ideas or product innovation.
The government is also thinking of taking on a larger share of the risk on itself, especially for small-size businesses who are asking for financial aid. This would also bring these assistance schemes within a closer reach, hence making company formation in Singapore easier.
Though this has been done for the Automation Support Package already, additional enhancements in the policy direction favoring smaller businesses can also be applicable to many of the current support schemes.
SMEs that are lower than a specific level of total sales turnover should be additionally provided with further attention in their grant applications; for instance by simplifying the requirements of documentation in the grant application procedure.
Seah was also of the opinion that the policy effectiveness should be sharpened by improving and quickening the grant approval process and lending better support to the trade associations (TACs).
A fast track scheme especially for getting grant approvals can be executed for some specific high-growth industries so as to encourage strengthening of investments in those particular clusters.
In addition, TACs would be given additional support in establishing new overseas offices so as to facilitate the local organizations that are getting into international markets, in a better manner.
Armed with an improved understanding of different types of enterprises and markets, the TACs will be able to pull in their resources and domestic contacts to assist their members in exploring the overseas markets. This can be probably more useful than Enterprise Singapore (ESG) overseas offices which are typically swarming with business-related and other bilateral relationship issues.
Seah was of the opinion that helping the businesses venture abroad, especially to Asean countries, might receive additional momentum in the Budget 2019.
With new trade and international investments expected to be diverted in this region in the coming few years, Singapore would be in a unique position provided its regional hub status, high level of enterprise sophistication and a wide free trade agreement network.
He also said that policy measures taken by the government to offer enhanced support for enterprises in enhancing their capabilities and offerings and in their attempt for internationalization is set to surely bring optimistic results in mid to long-term.
The government is expected to stay on track in its efforts of reformation to groom and prepare the economy for the future times, instead of using fiscal incentives as a counter-cyclical policy tool.
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