TODAY Singapore. English., © 2010 MediaCorp Press Limited

Singapore should set up an Export-Import or Exim bank-like institution to provide firms with funding to invest in operations overseas. That's one of the recommendations of the Economic Strategies Committee.

The sub-committee looking at developing a vibrant SME landscape and globally competitive local enterprises said SMEs often have problems getting loans to expand abroad because their requirements are too small to interest foreign banks. And local banks lend much smaller amounts for overseas activities.

To plug this gap, the sub-committee says an Exim bank should provide guarantees and even co-finance with commercial banks for project finance.

It added that the Government can co-invest with the private sector.

Over the next 10 years, up to $1.5 billion of new capital could be catalysed to help the growth of local enterprises and the Government is expected to contribute half the amount.

Other proposals include having the Government provide incentives for M&A, and broaden the scope of tertiary internships to provide SMEs with access to talent.

These strategies are expected to increase the number of Singapore firms with over $100 million revenues to 1,000 in the next decade.

This goal is achievable, said Dr Wilson Chew, group principal consultant and CEO of branding specialist StrategiCom. Going international has become less expensive as transactions can be done online, he said.

The Government can assist by matching local enterprises with potential customers as well, Mr Chew added.

Thomas Fernandez, chairman and CEO of PestBuster said beyond the funding, SMEs should also get guidance on the pitfalls of going abroad.

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