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Govt expands funding to help SMEs grow globally

SINGAPORE — As the push continues to help small and medium enterprises (SMEs) grow and become globally competitive, the Government is expanding the Co-Investment Programme (CIP) to help businesses source the financing they need to achieve these goals.

SINGAPORE — As the push continues to help small and medium enterprises (SMEs) grow and become globally competitive, the Government is expanding the Co-Investment Programme (CIP) to help businesses source the financing they need to achieve these goals.

The CIP, which was established in 2010, brings together funds from both the Government and the private sector for investment in enterprises that have passed the start-up stage and may need additional cash to grow.

Deputy Prime Minister Tharman Shanmugaratnam said the Government is providing an additional S$150 million for the scheme, to add to the initial S$250 million that was set aside when it was set up.

Noting that the scheme has had a good take-up, with S$160 million of the initial amount already deployed, triggering S$500 million worth of private-sector investments, Mr Tharman said: “The CIP scheme will continue to focus on investing in growth-oriented Singapore SMEs and providing the capital to help SMEs that need more time to execute their expansion and internationalisation plans.”

Attention was also devoted to newer SMEs whose lack of a business track record may limit their potential to obtain bank loans. To address this, the Government is raising its share of the risk under the Micro Loan Programme, which was set up to spur lending to young companies, from 50 per cent to 70 per cent.

This may encourage financial institutions to extend more potentially risky loans as their exposure, if they go bad, will be reduced.

At the same time, newer forms of funding are being looked at, said Mr Tharman.

“We are also studying the potential for equity crowdfunding, which is emerging in some countries as an alternative source of financing for start-ups and small companies,” he said, while adding that the Government is looking at an appropriate regulatory framework for such funding, which relies on individuals and organisations coming together to back projects and businesses that they believe will succeed.

Meanwhile, companies looking for overseas growth opportunities will also be offered an additional helping hand.

The maximum loan under the Internationalisation Finance Scheme will be raised from the current S$15 million to S$30 million.

“This will boost debt financing for companies to make additional asset investments abroad or fund working capital expenses for secured overseas projects,” said Mr Tharman.

And the Global Company Partnership Programme (GCP) will be expanded so that the Government’s support level for pilot and test-bedding projects will be raised from the existing 50 per cent to 70 per cent. The GCP is an International Enterprise Singapore initiative designed to help companies become globally competitive by providing relevant assistance in areas such as financing and building internal capabilities. “This is to assist our companies to establish track records and prototype new products to break into overseas markets,” said Mr Tharman.

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