SINGAPORE (June 5): Only three in 10, or 30% of small and medium-sized enterprises (SMEs) are now flagging cash flow concerns as a top priority, compared to over 70% of SMEs in February, during the early days of Covid-19, according to the DBS SME Pulse Check Survey.
The survey was conducted among over 300 SMEs in Singapore in the last week of the circuit breaker period in late May.
The 40% decline reflects the combined efforts of the government, and financial institutions in supporting SMEs during the Covid-19 global pandemic.
For medium-sized SMEs, DBS says that their most immediate priority post-circuit breaker, is to create new revenue streams to capture growth opportunities. Small SMEs prioritised access to both working capital to keep their businesses afloat, and to explore and create new income streams.
Despite the importance of preparing for a digital economy to cope with a post-Covid-19 world, the SMEs surveyed ranked digital transformation and workforce upskilling among their lowest priorities.
Only over 10% of SMEs indicated that digital transformation would be an immediate focus, says DBS. While some SMEs have already gone online to reach out to their consumer base, almost 50% of the SMEs surveyed said that their decision was made mainly due to a poor understanding of the benefits of doing digital, inadequate employee capabilities, and a lack of knowledge of available digital solutions.
That said, some 15% want banks to provide more advisory services on digital transformation, indicating at a willingness to transform their businesses digitally.
“Availing working capital support to viable SMEs continues to be important, but that alone is insufficient in preparing our SMEs for the road ahead,” says Joyce Tee, the group head of SME banking for DBS.
“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 says.
As at 4.48pm, DBS shares are changing hands 1.3% up at $22.28.