Almost half of local SMEs are optimistic about their growth prospects for 2023 (49%), while over 60% cited first-time overseas expansion and exploring additional new markets as key business priorities, compared to 75% who ranked these as lowest priority last year. The business owners continued to place high priority on ensuring consistent cashflow and managing cost. They were most concerned about rising global interest rates, labour costs and availability, and inflation. These were the results of DBS’ annual SME Pulse Check survey.

With the persistent challenging business environment, ‘ensuring consistent cashflow and managing cost’ (62%) remained the SMEs’ top business priority. Exploring additional new markets for their businesses (33%) and first-time overseas expansion (31%) were ranked next, encouraged by the reopening of borders along with support from government schemes such as the enhanced Enterprise Financing Scheme announced at Budget 2023. This was followed by ‘hiring, retaining and upskilling manpower’ (29%), sustainability and greening their businesses (25%) and digital transformation and innovating new business models (21%).

To achieve these goals, SMEs are looking for strong banking partners. The majority of SMEs (58%) ranked a ‘trusted and reliable banking partner with a long track record of supporting businesses’, as most important. Only 1% of SMEs preferred a ‘purely digital banking partner’. The banking partner’s presence and infrastructure was ranked most important (42%) for SMEs’ expansion into new markets.

The SMEs ranked ‘rising global interest rates’ (50%) and ‘labour costs and availability’ (43%) as their top concerns, followed by ‘inflation’ (36%), GST hike (26%) and ‘supply chain disruptions’ (25%).

The majority of SMEs said return on sustainability (35%) was the main challenge in building a sustainable/ green business, followed by 27% and 19% who cited ‘cost of deployment’ and ‘lack of government incentives/ funding’, respectively. 16% of the SMEs said they did not know how to start building a sustainable/ green business, and only a small number do not intend to build a sustainable/ green business (4%).

Koh Kar Siong, Group Head of SME Banking, DBS said, “SMEs are the backbone of our economy and have weathered different business and economic challenges over the last few years. They are resilient and optimistic as our survey has shown. As they explore new markets and expand overseas with borders reopening, I am confident that our connectivity across the region with our rich ecosystem of partners, together with the respective Singapore government schemes, will provide the necessary support to propel them to the next level of growth.”

He cautioned that continued headwinds from rising global inflation and high interest rates will add to SMEs’ operating expenses so managing cashflow and liquidity needs, along with effective credit risk management, will be critical to their success.

Since the start of the pandemic in early 2020, DBS has tapped on emerging technologies relentlessly to help SMEs, especially micro and small enterprises, manage their credit risk. “DBS has developed algorithmic models powered by artificial intelligence and advanced data analytics that alert us to potential signs of trouble faced by our customers. With these capabilities, over 80% of at-risk borrowers, averted risk,” Koh said.

DBS ran its regular SME Pulse Check Survey with 116 SMEs across a broad spectrum of industries to better understand the needs and concerns of the SME community.

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About DBS
DBS is a leading financial services group in Asia with a presence in 19 markets. Headquartered and listed in Singapore, DBS is in the three key Asian axes of growth: Greater China, Southeast Asia and South Asia. The bank's "AA-" and "Aa1" credit ratings are among the highest in the world.

Recognised for its global leadership, DBS has been named “World’s Best Bank” by Global Finance, “World’s Best Bank” by Euromoney and “Global Bank of the Year” by The Banker. The bank is at the forefront of leveraging digital technology to shape the future of banking, having been named “World’s Best Digital Bank” by Euromoney and the world’s “Most Innovative in Digital Banking” by The Banker. In addition, DBS has been accorded the “Safest Bank in Asia“ award by Global Finance for 14 consecutive years from 2009 to 2022.

DBS provides a full range of services in consumer, SME and corporate banking. As a bank born and bred in Asia, DBS understands the intricacies of doing business in the region’s most dynamic markets.

DBS is committed to building lasting relationships with customers, as it banks the Asian way. Through the DBS Foundation, the bank creates impact beyond banking by supporting social enterprises: businesses with a double bottom-line of profit and social and/or environmental impact. DBS Foundation also gives back to society in various ways, including equipping communities with future-ready skills and building food resilience.

With its extensive network of operations in Asia and emphasis on engaging and empowering its staff, DBS presents exciting career opportunities. For more information, please visit www.dbs.com.

DBS survey: Almost half of SMEs are optimistic about business growth this year