Survey reveals key priorities and challenges for Singapore’s small and medium-sized enterprises
A recent survey by DBS, the annual SME Pulse Check, highlighted that in 2023, cashflow and cost management continue to be the most pressing priorities for small and medium-sized enterprises (SMEs) in Singapore. According to the survey, 62% of respondents identified these areas as their top concern, followed by efforts to explore new markets (33%) and first-time overseas expansion (31%).
The survey, which was conducted with 116 SMEs across a variety of industries, revealed additional focus areas such as hiring, retaining, and upskilling employees (29%), sustainability and business greening (25%), and digital transformation alongside innovating new business models (21%).
Rising global interest rates emerged as the largest concern for SMEs, with half of the respondents citing this as their biggest worry. Other major challenges included labour costs and availability (43%), inflation (36%), the goods and services tax hike (26%), and supply-chain disruptions (25%).
Regarding banking partnerships, a mere 1% of SMEs preferred a fully digital banking partner. For the majority (nearly 60%), the most important factor was having a trusted and reliable banking partner with a proven track record of supporting businesses.
Koh Kar Siong, group head of SME banking at DBS, noted that the ongoing challenges from global inflation and rising interest rates are significantly increasing operational costs for SMEs. Managing cashflow and liquidity, alongside robust credit-risk management, will be vital for navigating these economic headwinds.
Sustainability remains a key objective for most SMEs, with only 4% not planning to adopt sustainable practices. However, 35% of respondents reported that the return on sustainability efforts was the primary obstacle to developing a sustainable business model. Other challenges included the high cost of deployment, lack of government incentives and funding, and insufficient technical knowledge within the market on how to implement sustainable business practices effectively.
