SMEs seek greater regional financing capabilities to facilitate expansion

Transcription

1 SMEs seek greater regional financing capabilities to facilitate expansion

2 Agenda About the survey Key themes and findings Conclusion Q&A 1

3 Focus The survey sought responses from more than 300 SMEs on four key areas Business Growth Outlook Asia Expansion Financing Needs Regional Agreements/ Collaborations How is your business expected to perform in 2016? Where are SMEs planning to expand to and why? What challenges SMEs face in financing when venturing overseas? How much do SMEs know about and leverage regional initiatives such as AEC and TPP? 2

4 About the respondents More than 300 C-suite executives of Singapore SMEs across different business sectors responded to the online survey conducted in November and December 2015 Industry Sectors Annual Turnover S$50m to S$100m 9% S$25m to S$50m 16% S$10m to S$25m 30% S$1m to $10m 29% > S$1m 16% N=304 3

5 Overseas presence A majority (96%) have a presence in at least 1-2 Asian markets. 60% of companies derive more than 20% of revenue from overseas Number of countries in Asia SMEs conduct business in % of revenue from overseas markets currently 37.0% 30.2% 19.6% 17.3% 16.4% 17.6% 10.3% 11.1% 9.4% 3.8% 7.0% 2.6% 1.8% 5.6% 3.8% 2.9% 2.1% 1.5% 0 1 to 2 3 to 4 5 to 6 7 to 8 9 to 10 > 11 > 5% 5-10% 11-20% 21-30% 31-40% 41-50% 51-60% 61-70% 71-80% 81-90% % 4

6 Agenda Agenda About the survey Key themes and findings Conclusion Q&A 5

7 2016 revenue outlook Increased overseas business activities drive confidence in revenue outlook Almost half of respondents (45%) expect an increase in revenue in 2016 Close to 60% from this group say overseas business activities will drive growth % 23% 22% 15% 35% 0 Decrease < 10% Decrease by 10-19% Decrease > 20% Stay the same Increase < 10% Increase by 10-19% Increase by > 20% 6

8 Increasing competitiveness to grow SMEs plan to increase their competitiveness by entering into new consumer segments and markets as well as increasing market adaptability. Managing cost remains a top priority 7

9 Asia Expansion India, Indonesia, Cambodia and China are top picks due to their geographic proximity, available resources and large domestic markets Which Asian markets will you be investing/expanding business activities in 2016?

10 SMEs see local insights key to succeed Close to 60% of SMEs identify lack of familiarity with the overseas markets and difficulty in identifying suitable local partners as biggest challenges when expanding overseas What would you say are the biggest challenges when expanding/conducting business in these overseas markets? Manpower challenges (e.g. lack of skilled talent) Lack of familiarity with the overseas markets Difficulty in identifying suitable local partners Uncertain political and economic environment Infrastructure (e.g. trade, transport, legal, regulatory) Lack of transparency Regulations and in business practices restrictions on foreign investors 9

11 Financing needs for overseas expansion 70% of SMEs face challenges to access funding without a proven track record in the host country What are some of the financing challenges you face when expanding overseas? Lack of knowledge of the financial, legal or regulatory system in the foreign market Difficulty in assessing funding without a proven track record in the host country Lack of established relationships with a banking partner in the host country 10

12 Regional financing capabilities in demand Banks with regional financing capabilities are in demand but few currently meet businesses needs In expanding overseas, what is the most important cross-border capabilities you value in a banking partner? 40% 19% 21% 58% 56% 32% 28% 55% % of respondents saying existing bank partner lacks this capability 11

13 On-the-ground banking capabilities a priority To conduct business more effectively in foreign markets, 42% of respondents say they will engage another banking partner in the host country. One in 3 respondents will look for banking partner in Singapore with cross-border financing solutions. How do you plan to get financing in 2016 (N=240) 26% 32% 42% 12

14 Awareness of regional initiatives Majority of respondents have heard of the Asean Economic Community (63%) and the Trans-pacific Partnership (58%) but do not know what they are and what they aim to achieve. Many have no idea if these regional initiatives will have an impact on their business growth These regional initiatives will create greater growth opportunities Strongly agree 8% 10% Agree 38% 37% Don't know 43% 47% Disagree 7% 7% Strongly disagree 2% 1% TPP AEC 13

15 Agenda About the survey Key themes and findings Conclusion Q&A 14

16 How can SMEs internationalise effectively? Leverage on the Singapore branding when regionalising their business Find the right banking partner with a strong regional presence and cross-border capabilities for their overseas expansion Capitalise opportunities presented by trade agreements or collaborations such as the AEC and TPP 15

17 Q&A 16