Budget 2019: What lies ahead for SMEs

This is an opinion piece by Mr. Mervyn Koh, UOB Singapore’s Managing Director and Country Head of Business Banking, sharing his take on Budget 2019.

The SME cluster is no doubt the backbone of Singapore’s economy, and a cornerstone of sustaining its vibrancy and competitiveness in global markets. Not surprisingly, over the past few years, the Singapore government has been rolling out fiscal policies in its budget to help SMEs prosper, both locally and globally.

What Budget 2019 has to offer

Prior to this year's announcement, we hoped that Budget 2019 would continue to build on the works of its predecessors by offering more digital and funding support for SMEs. We anticipated that the government would earmark additional expenditure towards R&D, innovation and digitisation for local companies.

In this regard, Budget 2019 has announced a Scale-up SG programme. Under this initiative, Enterprise Singapore (ESG) will collaborate with the private and public sectors to assist SMEs with identifying and building new capabilities to innovate and to globalise.

It is heartening that the government has enhanced the SMEs Go Digital Programme by expanding the range of cost-effective and pre-approved digital solutions for companies. These new solutions will also qualify for Productivity Solutions Grant (PSG), which provides up to 70 per cent funding, making it easier for SMEs to afford the solutions.

To make loans more accessible to SMEs, Budget 2019 has introduced a single Enterprise Financing Scheme that will combine the eight existing funding schemes of Enterprise Singapore under one umbrella, starting October 2019.

As one of the participating financial institutions, we are well-equipped to meet the expansion needs of more SMEs with the right financing tools. The extension of the SME Working Capital Loan scheme means UOB will continue to bundle various collateral-free solutions to offer up to $550,000 to support these companies’ daily operations. Younger companies in operation for at least one year will also have access to smaller loan sizes via the UOB Micro Loan scheme.

Helping SMEs ride the digital wave

In recent years, the Budgets have focused on encouraging digitalisation and innovation, which has benefited SMEs. For instance, the SMEs Go Digital scheme by Infocomm Media Development Authority (IMDA) has helped some 4,000 out of 200,000 SMEs in Singapore in basic technology adoption since its launch in 2017.

In fact, according to the ASEAN SME Transformation Study 2018 by United Overseas Bank (UOB), EY and Dun & Bradstreet, over 3 in 5 of Singapore's SMEs are placing more urgency on investing in technology over other fixed assets like equipment and machinery. However, many remain unsure of how to take the first step in their digitalisation journey, with two in three SMEs saying that they would appreciate a more customised approach when it comes to the assistance they receive on adopting digital solutions.

At UOB, our ongoing focus has been to help SMEs understand the digitalization process and embrace appropriate technologies easily.

We offer UOB BizSmart, which is a suite of integrated business solutions that helps SMEs seamlessly manage multiple core processes including sales, invoicing, payroll, and accounting. This solution aims to help SMEs alleviate the day-to-day administration by digitalising and integrating back office operations and can be connected to a UOB business account for seamless bank reconciliation. With ready information about operations and company financials, businesses can make more informed business decisions and generate better cash flow in the longer run.

UOB BizSmart is also integrated with industry-specific solutions including EzyProcure and Shopmatic. With EzyProcure, businesses in the food industry can manage their inventory and suppliers more efficiently by digitalising their purchase orders, goods receipts and payment reconciliation; whereas Shopmatic helps local retailers take their businesses online at a reasonable cost by providing them with a step-by-step guide, a user-friendly interface and store templates to choose from.

Similarly, we offer monthly digital clinics to help SMEs understand the digital world. Here, small businesses receive one-on-one customised guidance from our experts on how to implement digital solutions into their operations and seamlessly adapt technology to improve their current processes.

We have also collaborated with government agencies to assist SMEs in their business growth. UOB is a participating partner in the Start Digital programme, an initiative by ESG and IMDA. This initiative enables SMEs to start their digital journey early, by offering solutions in five core business functions. In order for new companies to easily afford this, we provide access to these solutions free for up to 12 months.

Future support for SMEs

Going forward, digitalisation will be an area of focus for SMEs to stay competitive. UOB will remain a key partner for SMEs by strengthening collaboration with government agencies and continuing our roll-out of new programmes and solutions. All in all, Budget 2019 is likely to be well received by the SMEs as it will offer the much-needed fuel to drive businesses, both domestically and internationally, ensuring the future of Singapore as a vibrant and innovative economy.