DBS Support for SMEs - Helping Small Businesses Thrive in the Post-Pandemic Economy

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

It is sobering to remember that it has been just about a year since Covid-19 roiled lives and livelihoods across the world. Businesses everywhere were affected, but SMEs were among the most badly hit by the pandemic.

In Singapore, the Government’s swift intervention with a record close to SGD 100 billon set aside to counter the impact of Covid-19 helped shield local businesses from the worst of the economic fallout. At DBS’ end, we have approved over 10,000 collateral-free loans totalling more than SGD 5 billion to SMEs in Singapore, with over 90% of the loans going to micro and small enterprises. I’ve seen first-hand the effect of these measures on SMEs. While we are not out of the storm, many are now in a much more stable position, and some SMEs have even started planning for a post-Covid future.

Our regular DBS SME Pulse Check reflects a more optimistic view by SMEs on their business recovery and growth in 2021. A poll we conducted in October 2020 with SMEs from industries most badly hit by the pandemic showed that 97% of respondents were confident of meeting their repayment obligations for Government-backed loans in the year ahead. This sentiment is echoed in the recent National Business Survey by the Singapore Business Federation (SBF), which showed that nearly seven in 10 believe they can sustain their business over the next 12 months.

Economic growth is also expected to stabilise as business activities gradually resume and revert to a more sustainable pace. Some sectors have even flourished during this period. For instance, the semiconductor segment has been growing due to strong demand for chips from the 5G market, cloud services and data centres. Despite this emerging optimism, SMEs in certain sectors such as aviation, tourism and hospitality will face a tougher road as a result of travel restrictions.

As such, we believe that beyond the broad base support we already offer our SMEs, including our working capital packages and digital transformation solutions, we need to offer more targeted assistance going forward. 

One big focus area of tailored support lies in connecting our customers. This includes helping our SMEs expand beyond their core markets, or simply introducing SMEs to new contacts within our ecosystems to diversify their supply chain for better resilience – we know that as their business partner, our job is to facilitate connectivity for SMEs in a meaningful way.

We will also double down on our focus on micro and small businesses, as well as social enterprises, who are likely to be most affected by the crisis. To amplify our support to the most challenged micro and small businesses, we will strengthen our partnership with trade associations like the Restaurant Association of Singapore (RAS) and the Federation of Merchants’ Associations Singapore (FMAS) to develop targeted solutions to help SMEs overcome their business challenges.

DBS will also continue bringing to bear the whole of our digital banking capabilities to support our customers’ digitalisation drive. It’s not just about addressing immediate concerns and helping SMEs keep the lights on for the short term, we want to help position them for recovery and long-term success. When SMEs see the impact that digitalisation has on their operations and bottom line, they will be encouraged to push forward and take their digital transformation to the next level. They are also better equipped to seize the opportunities that come their way in a post-pandemic economy vastly changed by accelerated digital adoption.

We will also continue to roll out sector specific initiatives and solutions while working with partners to further embed ourselves in our customers’ ecosystem. For instance, we worked with our technology partners to introduce the DBS F&B Digital Relief Package to help F&B operators impacted by tightened safe distancing measures build a digital presence and create new income streams online. We also launched the DBS Digital Resilience Package where F&B and Retail SMEs can claim up to SGD 10,000 under the Government’s Digital Resilience Bonus as they digitally transform their backend operations. 

Our deep understanding of our customers’ business and needs have also allowed us to co-create digital solutions specific to their industries and business, as a means to continue their business or even grow it despite the volatile economic situation. 

But even as we journey with our customers on their digital transformation, we also make sure that they do it in a safe and secure manner. We introduced a cyber wellness programme, to educate and guide our customers against phishing and scams – threats that have now become commonplace from our ever changing new normal and its push to go contactless.

As Singapore continues to restart its economy, we believe that a targeted approach to support our SMEs to be most prudent going forward. In this same vein, I foresee that Budget 2021 will also be very targeted in nature. The Government will likely channel resources to those industries or segments of society that are most in need, while continuing to enhance enterprise capabilities and upskilling of workers in the medium term.

On our part, DBS will continue to work hand in hand with the Government as well as industry associations to support our SMEs in the most meaningful ways possible. When we remain focused on the needs of our SMEs, we believe they stand the best chance of emerging from the ongoing storm in a stronger position.