Ravi Chandran
DBS survey of micro and small enterprises reveals resolve and conviction of business owners to protect employee livelihoods
- Business owners flag that mental well-being, personal finances have suffered; DBS rolls out measures to help business owners avoid burnout
- Seven in ten micro and small enterprises hope for more working capital or wage support measures in Singapore Budget 2021
- SMEs quietly confident about the road ahead, repositioning business models to capture new revenue streams and become more sustainable
Battling the economic fallout from the Covid-19 pandemic has taken a toll on entrepreneurs, especially those heading micro and small enterprises. A DBS survey showed that over eight in ten owners of micro and small businesses have made personal sacrifices to keep the lights on amid the pandemic.
Of this group, close to four in ten shared that their mental and physical well-being have suffered, while more than half shared that they have had to tap on their personal savings and assets to keep their businesses afloat.
When asked about the main motivation driving them forward despite facing what are some of the most challenging times in their entrepreneurial journey, around six in ten said that they felt responsible for protecting the livelihoods of their employees.
These findings emerged from the latest edition of the DBS SME Pulse Check Survey conducted at the start of the year with over 200 micro and small enterprises across a broad spectrum of industries.
Joyce Tee, Group Head of SME Banking at DBS, shared that it was important to remember that business owners are individuals who need to be supported too.
“Businesses involve real lives and livelihoods, and when it comes to micro and small enterprises, the stories are even more personal, with business owners sometimes needing to make personal sacrifices to keep their businesses going. With the economic situation and road ahead still uncertain, business owners must be ready for a long fight, and will need to take care of themselves to avoid burning out. That is why DBS is going beyond just supporting our micro and small enterprises with their working capital and digital transformation needs by rolling out new initiatives to cater to the well-being of business owners.”
To better support owners of micro and small enterprises with their mental wellness, DBS plans to extend to these business owners complimentary access to a mindfulness application specially tailored to the rigours of the workplace. DBS will also roll out a series of mental wellness webinars throughout the year to provide business owners with insights and actionable tips to enhance their mental well-being so that they can continue to be in optimal shape for the road ahead.
DBS will tap on its extensive financial planning capabilities to help owners of micro and small enterprises better manage their personal finances. The bank will run a series of webinars to equip business owners with strategies to manage their personal finances, as well as ways to leverage DBS NAV Planner, one of the world’s most advanced digital retirement financial planning solutions, for personalised insights that will enable them to achieve financial wellness.
Micro and small enterprises hope for more working capital, wage support in Singapore Budget 2021
With Singapore Budget 2021 due to be announced in less than two weeks, business owners were largely sanguine about growth prospects for the year ahead, with only 15% expressing pessimism.
However, over four in ten business owners hope that the Government can roll out more measures to support their working capital needs, while over three in ten would like more wage support measures.
These sentiments reflect the top three business priorities indicated by micro and small enterprises for the new year, which are (1) ensuring sufficient cashflow; (2) ensuring sufficient manpower; and (3) pivoting to new income streams.
When asked how business owners would like banks to support them in the year ahead, the top three responses were for more (1) working capital support; (2) connectivity opportunities; and (3) support to become more sustainable.
Tee noted that these findings reflect a sense of quiet confidence among SMEs that the bank has started to observe since late last year. A poll that DBS conducted in October 2020 with SMEs from industries most badly hit by the pandemic showed that 97% of respondents were confident of meeting their repayment obligations for Government-backed loans in the year ahead. The latest survey results further indicate that micro and small enterprises were starting to see some light at the end of the tunnel and were thinking about their business beyond the pandemic.
Tee added, “While working capital and cashflow concerns continue to be top of mind, business owners are giving serious thought to how they can reposition their operating models to capture new revenue streams in a changed world. This includes a growing appetite for more business partnerships. DBS is well-placed to plug micro and small enterprises into our network of ecosystem partnerships, including our larger corporate customers and technology partners, so that we can jointly realise new growth opportunities. We are also delighted that business owners are becoming increasingly keen on more sustainable operations. DBS will be rolling out new packages in the coming months to support our customers on this front.”
In 2020, DBS approved over 10,000 collateral-free loans totalling more than SGD 5 billion to SMEs in Singapore, with over 90% of the loans going to micro and small enterprises.
Mindful that micro enterprises are among the most vulnerable of businesses in an economic downturn, DBS made special effort to avail speedier working capital options to these businesses. The bank offered a Digital Business Loan to grant up to SGD 200,000 in collateral-free funding to business owners as quickly as the day after approval – double what businesses can obtain from some of the more popular digital lending alternatives in Singapore. DBS also simplified the credit documentation process to relieve micro enterprises of the onerous task of producing audited financial statements typically required for such loans. Instead, customers need only provide their most recent bank statement or Notice of Assessment for their application to be processed.
To help SMEs innovate, adapt and thrive in the post-pandemic economy, DBS has gone beyond just lending and availed a suite of digital solutions to help SMEs transform their businesses. These include the DBS F&B Digital Relief Package to enable F&B establishments to build a digital presence online in as fast as three days, while digitalising backend processes such as invoicing, accounting, HR, and payroll. SMEs can also tap on a range of payments and collections solutions, including DBS MAX, the bank’s mobile-based QR payment collection solution.
