Budget 2018: How It Affects SMEs and How DBS is Helping Them Succeed

Author: Joyce Tee, Managing Director and Group Head, DBS SME Banking

Around this time last year, I had written an article expressing my wish that Budget 2017 would provide SMEs with the assistance they needed to deal with the more immediate challenges they were facing.

As it turned out, there was less support than I had hoped for, which made me even more determined to carry out our mission to help our local SMEs succeed. Over the past year, we have embarked on various initiatives to do just that.

We intend to build on these initiatives this year as we hope for more relief for the local business community in the upcoming budget.

For Budget 2018, we anticipate a continuation of the medium to longer-term measures put in place by the Government in the last few years. For instance, we expect more measures to strengthen the Industry Transformation Programmes (ITMs) announced in 2016 that aim to promote innovation and deepen the capabilities of companies and industries.

As the ITMs for the 23 selected industries and clusters under the programme have already been announced, we expect the Government to focus this year on implementing the plans to truly benefit local businesses.

Companies looking to scale up and internationalise could also get help in the form of higher tax breaks or more assistance from the International Partnership Fund.

Meanwhile, measures like the Automation Support Package and the SME Go Digital programme could be enhanced to help firms invest in digital technologies.

Such an enhancement would be welcome, as we believe that helping businesses adopt new technology to overcome their challenges is important in light of the rapid changes affecting the economy. Indeed, helping SMEs embrace digital solutions is a key theme of our support for them.

In August last year, for instance, we launched the DBS TechMatch scheme. For companies that need a more customised digital solution, this service matches them with technology providers.

DBS had also signed an MOI with the Infocomm and Media Development Authority of Singapore (IMDA) to give SMEs access to financing to build new digital capabilities under the SMEs Go Digital initiative.

We further strengthened this partnership with IMDA to better support the digitalisation of SMEs by guiding local enterprises on the digital solutions to use at each stage of their growth using the Industry Digital Plan.

This means our SMEs now have additional avenues of specialist digital technology advisory and technology options.

Dealing with Disruption

As the business landscape became more uncertain, we thought it was critical for SMEs to master the fundamentals of running a business. As such, The SME Academy rolled out a series of classes designed for business owners in key areas such as improving productivity and cash flow management. Reflecting its popularity, more than 350 entrepreneurs have attended our classes across two installments, since we launched them in July 2017.

We also continued our popular series of industry events that focused on the technological disruptions facing businesses in various sectors. In June 2017, close to 400 participants attended our second F&B Disrupt @ The Bay event, where industry veterans and technology solutions providers shared with F&B operators innovations that are impacting the sector.

The aim of the Disrupt series is to help SMEs adopt digital tools to help them overcome their most pressing issues. To that end, we tied up with Xero, a leading cloud accounting platform, to give SMEs a reliable and up-to-date view of their financial position. We later expanded the partnership to help businesses also simplify their bill payments. Having this holistic view of their finances allows SMEs to better manage their performance as well as their cash flow needs better.

Working hand-in-hand with the Government and other partners, we have made progress in providing much needed support for our SMEs as they deal with challenges on multiple fronts.

While the outlook for the economy looks brighter in 2018, issues such as a tight labour market and technological disruption will continue to weigh on businesses. I once again hope that this year's Budget will offer more relief for SMEs. Regardless of whether it does, however, we will continue to roll out new programmes that will provide assistance to local firms where they need it the most.