THE Government is offering $123 million in funding to help local firms find new export markets and invest abroad - in part, to weather the current downturn.

The funding, over two years, is part of a range of new and enhanced programmes being offered by trade agency International Enterprise (IE) Singapore

This is in addition to vital Government-backed financing schemes to assist local exporters to beat the credit crunch.

IE Singapore expects these measures to generate $14.4 billion in trade and $1.6 billion in investments abroad by 2,500 local firms in the coming 12 months alone.

The $123 million, which includes $66 million set out in the Budget, will be available for training programmes and other efforts to help firms unfamiliar with exporting to identify exporting strategies and markets. It is expected to benefit almost 10,000 firms.

IE Singapore will also support up to $4.2 billion of loans through its new and existing financing schemes.

These schemes could help companies like Lee Yin Knitting Factory, which manufactures sweaters and which also owns winter-wear brand Coldwear. Its director John Lee said that the firm had successfully engaged IE Singapore in a rebranding exercise last year. Despite the downturn, he sees growth opportunities.

'This is very encouraging news. We are considering engaging IE Singapore again to help us in opening sales offices overseas, and to bring our brand abroad.'

IE Singapore's chief executive Chong Lit Cheong said at a press conference: 'It is crucial for companies to realise the importance of continued engagement in trade and internationalisation to help sustain their business in the long term...

'We urge companies to tap on the programmes.'

Mr Chong said that while trade had slowed significantly, China, India and Vietnam, despite slower growth, are still 'bright spots'. The Middle East and Africa also present opportunities.

On Monday, Parliament heard of plans to help exporters. Yesterday, IE Singapore gave more details of the Export Coverage Scheme (ECS) and Exporter Development Programme (EDP).

The EDP will help small and medium-sized enterprises (SMEs) with little export or overseas expansion expertise. There are about 150,000 SMEs here. Fewer than 30,000 of them are exporters and they export less than $60 million of goods a year, Mr Chong said.

Under the programme, to be launched by mid-year, the agency will organise six- to nine-month courses in areas such as planning export strategies, and also subsidise 70 per cent of the fees.

It will also pay for 70 per cent of the costs of overseas market visits including lodging and airfare. The programme will help about 250 exporters and will cost $6.1 million over the next three years.

It adds to schemes such as a $45 million programme to subsidise manpower, branding and intellectual property training for expansion abroad.

On the financing side, the ECS, will, for instance, make it easier for firms to obtain insurance against overseas buyers who may not able to pay up. This will protect cash flow in times of tighter credit and could help to reduce the risk exposure of banks and free up more lending.

The money for that will come from the $5.8 billion Special Risk-sharing Initiative, but Mr Chong did not disclose how much of that would be for the ECS.

Two existing financing schemes have seen a rise in take-up. Applications approved under the Loan Insurance Scheme for exporters rose from 56 last November to 71 last month. From November to early this month, 210 were approved, with loans insured amounting to $78 million. Only 2 per cent were rejected.

Mr Chong said another eight cases worth $23.7 million were approved in December and last month under the Internationalisation Finance Scheme which helps firms secure loans for overseas investments through Government risk-sharing.

The schemes are geared primarily to supporting SMEs here, therefore the loan amounts tend to be smaller, he said.

But he said the numbers showed that banks are willing to lend to firms able to prove they have the capability to go abroad. 'The system is not broken, but it is up to us to tilt the equation to make it easier for the credit department to approve the loans,' Mr Chong said.

chanckr@sph.com.sg