A new initiative was launched yesterday to help small and medium-sized enterprises build their financial management capabilities.
Spring Singapore will collaborate with the Singapore Exchange to run events that encourage SMEs to work on five key areas - corporate restructuring, risk management frameworks, corporate governance and internal controls, financial reporting, and investor relations.
The collaboration aims to help SMEs leverage on the SGX's private-sector expertise in financial management that is necessary for tapping capital markets.
SMEs often face challenges in accessing funds for growth, especially when investors raise concerns about their financial systems, processes and corporate structures.
The lack of strong internal controls and proper risk-management measures also makes these firms vulnerable to business shocks, which can limit their growth potential.
A PROFITABLE MOVE
It's been proven that companies which have a good financial management system... can actually generate profit margins 20 per cent to 30 per cent better than companies which don't.
MR PIYUSH GUPTA, DEPUTY CHAIRMAN OF SPRING
Spring deputy chairman Piyush Gupta, who is also DBS bank chief executive, said: "It's been proven that companies which have a good financial management system... can actually generate profit margins 20 per cent to 30 per cent better than companies which don't. A strong financial management system can also make a company more resilient."
The partnership was announced at the SME Financial Management Growth Seminar, which was also the first collaborative event under the new initiative.
The seminar, which was attended by more than 100 participants from 15 industries, aimed to impress upon SMEs the benefits of building a strong financial management foundation early on in their business.
Mr Mohamed Nasser Ismail, senior vice-president and head of SME development and listings at SGX, said: "A large spectrum of SMEs would also stand to benefit from this initiative, with trends of both larger and smaller SMEs being listed on Catalist over the last three years." Catalist is the second board of SGX.
More than 400 SMEs have embarked on financial-management capability upgrading through Spring's various support mechanisms, such as the Innovation and Capability Voucher and the Capability Development Grant (CDG).
Mr Gupta said Spring is simplifying the application process for smaller-scale projects to make it easier for SMEs to tap the CDG.
He said that Spring also aims to establish collaborations with the Singapore Accountancy Commission, trade associations such as the Institute of Singapore Chartered Accountants and financial institutions serving the SME market.