SINGAPORE (THE BUSINESS TIMES) - Cash flow issues appear to have eased for Singapore's small and medium-sized businesses (SMEs) as government relief kicks in, a DBS Bank survey conducted in the final week of Singapore's eight-week circuit breaker found.
Three in 10 SMEs now flag cash flow concerns as a top issue, compared with more than seven in 10 when asked the same question in early February.
DBS, which polled 300 firms in its recent survey, attributes this to the authorities' relief efforts.
The bank said in a statement on Friday (June 5): "This 40-percentage-point drop indicates that the combined efforts of the Government and financial institutions in supporting SMEs in their working capital needs are bearing fruit, giving SMEs much-needed relief from intense cash flow pressures that they would otherwise be facing."
Now, the most immediate concern for medium-sized businesses - those with annual revenues above $20 million - is creating new revenue streams to capture growth opportunities as the nation eases out of the partial lockdown. About half of these firms identified this as their top-most priority.
For smaller enterprises (defined as those with annual revenues of $1 million to $20 million), access to working capital and creating new income streams were cited as equally important priorities. Overall, the firms surveyed ranked digital transformation and workforce upskilling among their lowest priorities, with just one in 10 considering digital transformation an immediate focus, and only 3 per cent flagging workforce upskilling as a priority.
Close to half of the firms cited insufficient knowledge of the digital solutions available, a poor understanding of digitalisation's benefits, and inadequate employee capabilities among the primary reasons hindering their digitalisation efforts.
DBS group head of SME banking Joyce Tee said that just making available working capital is insufficient in supporting SMEs for the road ahead.
"With SMEs starting to focus on building new income streams, banks, industry associations and the Government can step up by offering innovative solutions for our local enterprises to identify and create new revenue opportunities. In doing so, we are helping our SMEs become more resilient so that they are better prepared to ride through the oncoming economic headwinds," she said.