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Continued from
FrontPage of Article
INNOVATION & TECHNOLOGY
Singapore SMEs appear divided over the adoption of technology as a
means of driving business growth and maintaining competitiveness.
Fifty-three percent (53%) of respondents believed that investments
in Innovation & Technology has increased their productivity, with
37% experiencing increased cost efficiency as a direct result of
innovation and technology adoption. However, a significant 32%
believe technology has no impact at all on their business.
The majority (85%) of the companies that see no benefit in new
technology tend to be the smaller SMEs employing fewer than 25
people. Sixty-two percent (62%) of SMEs were open but unsure of how
to strengthen their technological capabilities. On a positive note,
of the companies that have adopted new technology and enjoyed its
benefits, 92% plan to make further technology investments in the
next two years.
FINANCING & FUNDING
SMEs are still showing a strong reliance on Overdrafts (40%)
although this has fallen from 47% in 2004 and 44% in 2005.
Utilisation of Long Term Loans has been steadily increased from 26%
in 2004 and 29% in 2005, to 34% in 2006. A similar steady upward
trend in the use of Short Term Loans has also been observed, from
21% in 2004 and 25% in 2005 to 27% this year. Trade Financing is the
third favoured option at 32%. There is a continued increase in SME
using a mix of short and long term financing options, reflecting
better financing options that banks are currently offering to the
SME market segment.
Fifty-one percent (51%) would like to see a shift towards
non-collateral based financing like the MicroLoan. Industry-specific
financing schemes are also favoured by 48% of SMEs, and 37% see the
adoption of SME Credit Ratings as a tool to access better funding.
Twenty-five percent (25%) have suggested a SME-centric financial
institution would best serve their needs.
The number of SMEs with No Banking/Funding Facilities is up from 19%
in 2005 to 38% in 2006. This may be attributed to an 11%
representation of Start-ups in the respondent demographics this
year. Start-ups (defined as SMEs with fewer than 3 years of
operation) will find it difficult to gain access to traditional bank
financing options as banks lend according to the SMEs' ability to
pay coupled with a track record.
RECOMMENDATIONS
DP Info has made 6 recommendations in the following areas,
including:-
- Assisting SMEs in the area of manpower issues;
- Helping the SMEs to have better access to government tenders and
quotations;
- Putting more focus on Start-Ups to help them gain experience through
mentoring and regional exposure as well as facilitating access to
other sources of funding;
- Supporting SMEs to leverage new technology or innovations to address
their cost efficiency and productivity issues;
- Leveraging more on FTAs; and
- Providing more innovative financing solutions to SMEs through the
adoption of SME Credit Ratings.
(NB: Details of the recommendations are contained in the full
report)
FREE CREDIT RATINGS FOR SMEs WITH NATIONWIDE SME CREDIT
RATING INITIATIVE
www.smecreditrating.sg
In support of the SME community and their growing call for the use
of credit ratings to assist them in securing financing, being more
transparent and facilitating overseas business, DP Info has taken
the first step in a nationwide SME credit ratings initiative. It is
DP Info's intention to help SMEs, banks, potential financiers and
business partners connect by gaining rapid access to a globally
recognised credit rating# of SMEs.
Available through
www.smecreditrating.sg, over 10,000 names of SMEs that have been
privately rated by DP Info over the past few years will be listed
initially. SMEs prelisted may obtain their credit rating from DP
Info for FREE* until 30 September 2006. In addition, SMEs that are
not listed as yet and would like to get a FREE* credit rating of
their company may get in touch with DP Info via the website.
Additionally, SMEs may also opt for their credit rating grade to be
published publicly on the website for FREE for a period of 12
months. The better credit rated SMEs may choose this as a method to
distinguish themselves from the larger group of 100,000 SMEs in
Singapore. Twenty percent (20%) of SMEs are in the DP1-DP4
(Investment Grade) category.
Ms Chen Yew Nah said, "The nationwide SME Credit Ratings website is
a major step forward in improving the level of transparency among
Singapore SMEs. Interested SMEs may go online and check if they are
prelisted."
"Credit ratings allow SMEs to demonstrate their financial standing
without having to reveal sensitive information. They are an
invaluable tool when meeting new suppliers, customers or business
partners or expanding into new markets. They also assist SMEs in
obtaining financing through banks and other lending institutions'
banks are always on the lookout for alternative ways to engage SMEs
of different credit profiles," Ms Chen emphasized.
# Credit rated using DP Info's DP Credit Rating Approach (see
appendix 1)
*Terms & Conditions Apply: FREE until 30 September 2006 and when SME
submits their latest full audited financials to be credit rated and
to participate in 2007 Singapore 1000 & SME 500 rankings.
@ A full and detailed credit report on the rated companies is also
available for a fee.
ABOUT
DP Information Group (DP Info) is Singapore's leading credit and
business information bureau. A veteran of 28 years, we currently
service 95% of Singapore's financial institutions and some 75% of
leading law firms. Through our 24/7 online information portal,
QuestNet, we enable our clients to make confident credit management
decisions everyday based on comprehensive, accurate and reliable
information.
DP Info Group is a partner with leading international scoring and
ratings agencies such as Moody's| K.M.V and Fair Isaac, providing
corporate and consumer credit management solutions for the national
credit risk management markets.
DP Info is a strong advocate for the SME and entrepreneurial
segment, managing and operating an ACRA-appointed service bureau, DP
Bureau, which assists SMEs and entrepreneurs in starting their
business and operating them effectively and efficiently through
their initial years.
Information Services
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Corporate / Individual
Information & Litigation Searches
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Industry Research &
Survey Management
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Singapore 1000 & SME
500, Singapore International 100 & Fastest Growing 50 Rankings &
Certification
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Marketing Lists &
Campaign Management
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Credit, Legal & Market
Monitoring
Credit
Management Services
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Corporate Credit
Rating & Consumer Scoring
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Corporate & Consumer
Credit Bureau
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Debt Recovery &
Account Receivables Management & Training
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Credit Portfolio
Analysis & Consultancy
SME Bureau
& Advisory Services
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Registration & Filing
of Local & Foreign Companies/Business
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SME Regulatory /
Application / Business Services
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SME Advisory Services
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MOF Appointed Bureau
for Government Supplier Registration Services
DP Information Network
Pte Ltd is an ISO/IEC 27001 Information Security & Data Management
certified company. Certification No. GB06/68548
www.dpgroup.sg
APPENDIX 1
Guide to DP Credit Rating
|
DP Credit Rating |
Expected Default Frequency |
Explanation |
Status |
| DP-1 |
<0.1% |
Possess extremely strong financial
fundamental with high incentive and capability for repayment
of obligations. |
Premium |
| DP-2 |
0.1% - <0.2% |
Has strong financial health with
above average capability for meeting payments. |
Premium |
| DP-3 |
0.2% - <0.4% |
Stable financial health and above
normal operational environment. General unfavourable factors
are not likely to cause distress. |
Strong |
| DP-4 |
0.4% - <1.0% |
Overall financial health and
operation are considered normal. Capable of meeting its
commitments. May be susceptible to difficulties in the event
of drastic changes in economic conditions. |
Strong |
| DP-5 |
1.0% - <3.0% |
Adequate financial capabilities to
meet normal commitments. However, adverse changes in economic
condition could lead to doubtfulness in the ability to pay. |
Moderate |
| DP-6 |
3.0% - <8.0% |
Sufficiently sound financial
ability to meet normal obligations. Capabilities in reacting
to adverse operational condition are limited or consider
doubtful. |
Moderate |
| DP-7 |
8% - <14.0% |
Weakness in financial ability is
apparent. Vulnerable to unfavourable changes in the economic
and operational environment and is likely to fall into a
weakened financial condition. |
Monitor |
| DP-8 |
14.0% - <20% |
Apparent weakness in financial
health with limited capability to meet its obligations
especially in the event of any adverse changes in operating
environment. |
Monitor |
*DP 1 to DP 4 is
comparable to 'Investment Grade' rated securities, and DP 5 to DP 6
is comparable to 'High Yield' rated securities, and DP 7 to DP8 is
comparable to 'High Risk' rated securities.
Source:
www.dpgroup.sg Press Release
21 Aug 2006
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Survey shows manpower issues a
growing concern for SMEs
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