Singapore SME`s are facing cash flow challenges

Company Small and Medium Enterprises (SME) in Singapore to face difficult challenges in their efforts to obtain financial assistance and receive timely payment.

The findings of Study SME Banking Visa and Deloitte Digital also shows that SMEs make up 47 percent of Gross Domestic Product (GDP) and more than 80 percent of these companies had a turnover of more than $ 1 million.

However, only 60 percent of SMEs to obtain bank loans for funding while 41 per cent were not funded any financial institution. 8 percent were found to be ineligible for SME lending.

This paper focuses on SME across several Asean region's economic and financial issues, banking and payments made against them.

Markets of interest include Singapore, Malaysia, Thailand, Indonesia and the Philippines.

Through this study, it shows that SME are facing some financial challenges, including cash flow and deferred payment.

A total of 72 percent of SMEs in Singapore now requires funds to manage their budgets better than dealing with cash flow problems, compared to 62 percent who faced a similar situation in 2011.

Some 37 per cent of SMEs in the republic is facing outstanding payments more than 30 days, and this number is higher than SME in Asia Pacific (30 percent); United States (32 percent); and Europe (31 percent).

The main reason for these outstanding payments was due to inadequate liquidity, which make up 48 percent of the reasons given.

Visa General Manager for Singapore and Brunei, Ms. Ooi Huey Tyng, said: "SMEs form the backbone of Singapore's economy in terms of contribution to GDP and they are also a major source of employment.

"It is important that SME's facilities in the description of modern finance to conduct business operations in the most productive environment.

 

"Our findings show that many SME left in the lurch to the distribution and receipt of payment, and do not utilize electronic description. This raises the issue of cash flow and prevents SMEs from operating their businesses more effectively," he said.

In addition to that, the study also showed that SMEs face the challenge of non-financial, such as human resources and competition.

The issue of energy supply is a major concern for SMEs, of which nearly half of respondents said that difficulties in recruitment and the high cost of labor.