Update on SME Working Capital Loan Scheme
Ministry of Trade and IndustrySpeakers
Summary
This question concerns the utilization and impact of the SME Working Capital Loan Scheme, as raised by Mr Liang Eng Hwa. Minister for Trade and Industry (Industry) Mr S Iswaran reported that the scheme catalysed over $700 million in loans for approximately 4,300 SMEs between June and December 2016. He noted that 96% of SME applicants for working capital loans were successful, with 82% of approvals falling below the $300,000 maximum quantum. Minister for Trade and Industry (Industry) Mr S Iswaran stated that the scheme is currently sufficient but the Government is prepared to provide greater assistance if necessary. Financing needs are monitored through regular meetings with financial institutions and trade associations to ensure ongoing support for viable businesses.
Transcript
26 Mr Liang Eng Hwa asked the Minister for Trade and Industry (Industry) (a) what is the number of applications and utilisation rate of the SME Working Capital Loan Scheme since its introduction in 2016; (b) whether SMEs face cash flow concerns or inability to obtain funding for their business growth; and (c) whether there are plans to enhance the attractiveness and availability of the scheme.
Mr S Iswaran: The Small and Medium Enterprises (SME) Working Capital Loan was announced at Budget 2016 to help viable SMEs access working capital and continue growing their businesses. The scheme complements existing Government loan schemes and commercial loans offered by financial institutions. Since its launch in June 2016 to December 2016, the SME Working Capital Loan has catalysed more than $700 million in loans, benefiting approximately 4,300 SMEs.
Based on the 2016 DP Information Group SME Development Survey, 96% of SMEs which applied for Government and commercial working capital term loans of five years and below were successful in their applications. This comprised 79% which received the full amount requested, and 17% who received partial approved amounts.6
Of the approved loans under the SME Working Capital Loan, 82% are less than the maximum quantum of $300,000. The current scheme is therefore sufficient to meet the needs of most applicants. The Government has regular meetings with the financial institutions and chambers and associations to understand and monitor the financing needs of SMEs and is prepared to provide greater assistance if necessary.