Singapore companies struggling to raise capital for expansion will get more help from the Government.

To spur private investment in small and medium-sized enterprises (SMEs), the Government is offering another $150 million in a co-investment scheme that has already catalysed $500 million worth of private funding for local firms.

The Co-Investment Programme (CIP) was launched in 2010 and has already dispensed $160 million, said Deputy Prime Minister and Finance Minister Tharman Shanmugaratnam in Parliament on Friday.

Announcing an additional $150 million of capital for this programme, he said that the amount would be allocated to two funds.

One will make direct equity investments in companies alongside other private equity investors, and the other will meet the demand from SMEs for "mezzanine funding", which is a hybrid debt-equity system.

In addition, Mr Tharman said that the Government would take on more of the risk in its micro-loan programme, which is aimed at helping young SMEs raise capital.

Spring Singapore, the Government's agency for SMEs, will raise the government risk share from 50 per cent to 70 per cent in the scheme. This is expected to catalyse an additional $32 million in loans for the next two years of assessment, he said.

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