Assistance for Singapore Businesses to Cope with Ongoing Economic Slowdown

Ms Low Yen Ling asked the Minister for Trade and Industry (a) whether there are schemes and mechanisms in place that can help Singapore businesses deal with the triple impact of sluggish US growth, European recession and the slowdown of China and India; (b) whether the Ministry will consider stimulus or cushioning measures, especially for export-reliant SMEs; and (c) whether there will be alternative sources of financing if businesses suffer a credit crunch due to the global economic uncertainty.

Mr Lim Hng Kiang: The Singapore economy is projected to grow at a moderate 1%-3% in 2012 on the back of slow global growth. In response, the Government announced several measures in Budget 2012 to support businesses. For example, IE and SPRING Singapore have enhanced the support level of their capability development schemes from 50% to 70% of qualifying costs for the next three years. The scope of these schemes was also expanded to include automation and business transformation projects. These measures help businesses to build capabilities, enhance productivity and expand market reach during this period of low growth.

These scheme enhancements complement our existing financing schemes, like SPRING's Local Enterprise Finance Scheme and Micro-Loan Programme, and IE's Loan Insurance Scheme and Trade Credit Insurance Scheme. These financing schemes support the growth of our businesses, particularly SMEs, by increasing their access to financing should private financial institutions become less forthcoming in extending credit due to portfolio covenants.

The Government is keeping a close watch on global economic developments and their potential impact on Singapore's economy. We are ready to respond with measures to help Singapore businesses if needed. The exact form of the measures will depend on how developments in the global economy unfold and the specific needs of businesses affected.

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