Tag: SMEs

Indonesia – In the middle of businesses taking their recovery from the after-effects of the pandemic, almost half of Indonesian small businesses, or 44%, plan to consider alternative and non-traditional lenders moving forward, this is according to a new report commissioned by analytics software company FICO. 

This percentage reflects the Indonesian SMEs that expressed interest in trying new borrowing products in 2022 with 45%. APAC-wide, SMEs are citing dissatisfaction with their main banks. The report found that 62-70% of APAC SMEs are less than satisfied with their main bank’s level of support in response to the COVID-19 outbreak.

The report noted that the insights indicate early signs that traditional banks in Indonesia are at risk of losing SME business to non-traditional competitors.

The top drivers for Indonesian SMEs in choosing a funding provider are competitive interest rates (49%), ease and speed of application process (39%), and the ability to gain the lending options or credit line suited to their needs (33%). 

“The pandemic put a sudden, massive burden on SMEs, globally, and they didn’t think banks did enough to help them,” said Aashish Sharma, senior director of decision management solutions in Asia Pacific for FICO. 

“Indonesia’s SMEs have made it clear that they require financial support in 2022 but are less optimistic about getting it from their main banks. This is a potentially worrying trend for traditional banks, considering there are over 62 million SMEs in Indonesia, which is one for every five Indonesians,” Sharma added.

The report noted that banks need to understand what’s causing SMEs to consider alternative funding sources. SMEs across APAC pointed to frustrations with the typical funding process of traditional banks and identified room for improvement in specific areas which is led by access to credit (70%), followed by financial assistance (69%), and information and guidance (68%). Meanwhile, businesses in the region also said traditional banks must improve with regards to transparency in decisions and processes (68%) and speed of response (64%). 

Singapore – After Singaporean neobank YouTrip hinted on the launch of its new B2B product, the fintech officially unveiled YouBiz, its corporate credit card for SMEs, in partnership with Mastercard. This development follows YouTrip’s recent US$30m Series A funding.

The new product is integrated with a unified control centre bringing together multi-currency accounts, local and domestic transfers, corporate expense management, and credit features in a single hub.

YouBiz offers SMEs unlimited cashback on all spends with no cap, eliminating the need to manage and optimise their spending types. Together with savings from YouBiz’s zero foreign currency transaction fees, companies can rack up additional funds to power other business operations. Spending and managing individual employee expenses is also convenient with YouBiz’s ability to generate physical and unlimited virtual cards for payments in over 150 currencies at more than 80 million Mastercard merchants worldwide, online and in-store. This not only reduces the risk of card-sharing, custom spend limits on each card also prevent employees from overspending.

Moreover, YouBiz allows SMEs to receive, hold, and spend in nine currencies currently and make an immediate exchange at competitive rates and no fees. Doing business is also more accessible than ever with free local transfers and low, transparent pricing for international remittance. All transactions are delivered and streamlined in YouBiz’s unified control centre, making expense management and reconciliation a seamless process.

Arthur Mak, YouTrip’s co-founder and chief product officer, said that the concept of borders has blurred during the pandemic as SMEs increasingly do business internationally, and their cross-border payment needs are definitely going to rise – yet, many of their financial needs remain unmet due to the lack of a tailored financial solution. 

“Our continued partnership with Mastercard empowers us to establish YouBiz as a valuable and reliable partner for SMEs to grow beyond borders. Promising efficient and purpose-built financial solutions at the best value, we help businesses save time and cost as they focus on scaling worldwide,” added Mak.

YouBiz is also introducing a credit facility that offers flexible business financing to SMEs. Combining transactional data and machine learning, YouBiz allows businesses to obtain unsecured and collateral-free term loans with no hidden or early repayment fees. The application is fuss-free and loans are disbursed seamlessly into the YouBiz account within 48 hours.

In addition, YouBiz has collaborated with Google to provide businesses with direct support for digital marketing services, and established travel partners like Agoda, Booking.com, and Qatar Airways on additional savings for travel expenditure, especially as business travel resumes.

Mak shared that they have invested heavily in building their multi-currency technology infrastructure and obtaining a full set of licences for YouBiz. 

“Having this control over our value chain enables us to offer the most customisable and cost-effective financial solutions for businesses. We look forward to partnering closely with SMEs to innovate and customise our offerings to meet their shifting demands,” said Mak.

Meanwhile, Deborah Heng, Mastercard’s country manager for Singapore, noted that partnering with YouTrip on this innovative product will complement the work Mastercard has already done to help SMEs drive their overall digital transformation and harness the opportunity of rapid growth in online marketplaces. 

“As these digital merchants expand their business across borders, they will come to recognise both the competitive advantage and the savings they will enjoy from zero foreign exchange fees, unlimited cashback, integrated expense, and cashflow management. YouBiz also comes at a fitting time with the recent uptick in global travel and accelerated e-commerce growth, further supporting SMEs to scale and transact easily, both locally and abroad,” said Heng.

Singapore – Small-and-medium enterprise (SME) digital financing platform Funding Societies has announced their latest market expansion in Vietnam, marking the company’s fifth market expansion. Said expansion aims to tap into the country’s growing yet financially underserved SME landscape.

Kelvin Teo, co-founder and group CEO at Funding Societies, said, “Since our inception in 2015, our vision is to uplift societies in Southeast Asia. Hence, Vietnam has always been part of our roadmap. This is an opportune time as we ride out of COVID-19, build a solid team with local finTech veteran Ryan Galloway, and secure investment from tech giant VNG. We believe that Vietnam will be one of our largest markets given its enormous potential.”

Earlier this year, Vietnamese tech giant VNG Corporation invested US$22.5m in Funding Societies as part of the fintech company’s US$294m series C+ fundraise, of which US$144m was raised in equity and US$150m in debt lines. Funding Societies also received the support of other notable investors in the funding round, including SoftBank Vision Fund 2, Rapyd Ventures, EDBI, Indies Capital, Ascend Vietnam Ventures, and K3 Ventures, among others. 

Through the aforementioned funding, VNG will help Funding Societies to quickly adapt to the local market so it can provide solutions tailored to the unique needs of Vietnamese businesses.

Meanwhile, Ryan Galloway, country director of Funding Societies Vietnam, commented, “Vietnam SMEs don’t have the same access to venture and early-stage capital markets as other Southeast Asian markets, but the Vietnam market is equally as competitive, so Vietnamese entrepreneurs are trained to do more with less. We see lots of opportunity in Vietnam and we’re excited to support the country’s burgeoning SME landscape as we continue to serve the needs of millions of SMEs across Southeast Asia.”

Recently, Funding Societies have invested alongside automotive car marketplace platform CARRO at Bank Index, an Indonesian national Bank. The move serves as a significant milestone in Funding Societies’ entry into the neobanking space.

Singapore – Consumer bank DBS has expanded its partnership with global small business platform Xero to simplify the loan application process and increase access to working capital for SMEs in Singapore and Hong Kong.

The expanded partnership will see both companies availing Xero customers of the option to share their transactional records from Xero’s platform with DBS, and by doing so, customers will be able to present a more holistic picture of their cash flow which in turn enables the bank to offer SMEs hyper-personalised credit terms and working capital limits tailored to their needs.

DBS and Xero began their partnership in 2017 with a bank feed integration to give SMEs greater visibility and control over their finances with automatic bank updates. Xero is also a key partner of the bank’s DBS Start Digital Package, which is designed to help SMEs kickstart their digital transformation journey.

Joyce Tee, DBS’ group head of SME banking, noted that their regular engagement with SMEs has consistently shown that cash flow needs continue to be top of mind for their clients, even as business owners seek new growth opportunities.

“We will continue to integrate our touchpoints seamlessly into the customer journey, so as to offer our SMEs more intelligent and intuitive lending solutions. DBS has been sharpening our digital lending capabilities by leveraging ecosystem partnerships and advanced data analytics to roll out solutions that are hyper-personalised to each business’ needs. DBS is pleased to take our long-standing partnership with Xero to the next level as we double down on our commitment to helping SMEs accelerate their growth,” said Tee.

Meanwhile, Joseph Lyons, Xero’s managing director for Australia and Asia, shared that digital tools and solutions have been a significant driver in empowering SMEs to become more resilient and competitive, but working capital is the lifeblood of small businesses everywhere.

“With DBS – our first banking partner in Singapore to offer API integrated bank feeds – we are excited to extend new offerings to our shared customers through SME financing. We look forward to continuing our work to further support SMEs with their financing needs, particularly in ensuring small businesses have the support they need to thrive,” said Lyons.

New Zealand – Insurance provider Zurich in Australia has announced that it will be launching its small business enterprise (SME) insurance offering to the New Zealand market. The new SME offering is said to be a response to the high level of underinsured small businesses in the country. 

Selected brokers can now access Zurich’s innovative Z.stream technology which enables them to provide quotes and bindings for new business, process renewals quickly and have 24-hour access to mid-term policy adjustments and endorsements as well as near-real-time access to claims data and reports for new business.

Zurich said it has identified the most typical SME claims and notes that underinsurance or no insurance is not only about the direct cost of that event, but the loss of income if operations are disrupted.

Brett Wainhouse, regional manager of New Zealand at Zurich, said that SMEs are doing it tough in New Zealand, so they are delighted to be giving brokers the tools and technology to offer small business customers a fast and efficient insurance cover with claims handling that is backed by Zurich’s global strength and local care.

“Our Z.stream technology is unrivalled in this market. This level of sophistication has never been available to New Zealand brokers before now and it’s a key reason why Zurich is a leader in commercial insurance in many global markets. The platform is a gamechanger, focused on speed and simplicity whilst removing legacy inefficiencies and creating a better customer experience,” Wainhouse said.

Wainhouse emphasised, “Our global expertise in the SME segment means we learn about emerging technologies across the world ahead of the market and we can pass on this intelligence to our commercial motor and property customers in New Zealand, giving them a competitive advantage.” 

Zurich’s SME product is offered through insurance brokers only and will be rolled out in the first instance to Steadfast, NZ brokers, and Insurance Advisernet before launching to the rest of the market.

Hong Kong – Fintech platform Airwallex has launched an SME support initiative worth HK$2.5m, where they will provide a series of exclusive offers to help businesses recover and reopen from the pandemic while managing costs.

Through this initiative, SMEs can open an Airwallex business account for free, and also enjoy HK$0 transfer fees for international payments to 60 destinations. Customers will also be able to enjoy exclusive subscription fee discounts, rebates and other perks through Airwallex’s local partners including Boutir, Bowtie, GOGOX, Google Ads, Google Workspace, SleekFlow, Xero and YOOV. 

Arnold Chan, head of SME for Hong Kong and Singapore at Airwallex, said, “SMEs are the backbone of Hong Kong’s economy, and in the months ahead, many of these businesses will continue to face challenges in managing their financials and cash flows.”

He added, “As the pandemic situation continues to impact local businesses, we hope that by doing our small part, we can help local businesses power through these difficult times and facilitate their path to recovery. With support from our partners, our offers aim to provide a more convenient and cost-efficient solution for making cross-border payments.”

The initiative comes as Hong Kong SMEs continue to combat the coronavirus related economic disruptions, and are experiencing numerous hurdles as they try to recover and rebuild in the wake of the pandemic. With over 340,000 SMEs operating in Hong Kong today, these businesses serve as vital economic engines for the city.
Airwallex had recently partnered with Hong Kong-based investment company Choco Up to support the future growth of cross-border e-commerce in the region, as well as expanding its services in Singapore.

Indonesia – DBS Foundation, an endeavour from DBS Bank to make a great impact in addressing Asia’s evolving social needs, has launched a new grant programme to support SMEs looking to kickstart their transition towards becoming more sustainable businesses. 

This new programme is an extension of the DBS Foundation’s ongoing support for social enterprises (SEs), as it endeavours to foster the growth of businesses-for-impact, which is defined as businesses with dual bottom lines of profit and impact, regardless of their stage of growth.

The new grant programme is in search of SMEs, which are incorporated in Indonesia, as well as in Singapore, Hong Kong, Taiwan, and India, with innovative sustainability solutions. Their proposals should address at least one of the following areas, namely reducing energy consumption, reducing waste, or sustainable supply chains.

The grant awardees will be receiving a grant amount of up to IDR1,051,405,196, a structured mentorship and advisory support, where DBS Foundation and the DBS SME Banking team will work with each SME awardee to map out key milestones and impact outcomes across a two-year horizon, and support from broader DBS franchise to help promising grant awardees to scale their businesses, including a range of working capital, supply chain financing, and digital transformation solutions.

Joyce Tee, the group head of SME banking at DBS and the board member of DBS Foundation, shared that while their engagement with SME owners has revealed their keen interest in adopting more sustainable business models, they are often caught up with operational matters and may lack the bandwidth or resources to begin. 

“This is a gap that the DBS Foundation aims to fill with the new SME Grant Programme, which will help SMEs take their first step towards transforming into businesses for impact. Beyond grant funding, DBS will also avail our suite of sustainable financing solutions, ecosystem platforms and advisory services to help the most promising SME awardees accelerate their transformation efforts,” said Tee.

Hong Kong – Amidst a looming fifth wave of COVID-19, small and medium enterprises in Hong Kong are confident that they will overcome it, according to the data collected by dual studies conducted by CPA Australia.

The data shows that in order for these SMEs to overcome the fifth wave, small businesses may need to increase their investment in technology and innovation, and reset their business strategy. In it, 55% of respondents to the March poll were confident that their business or employer will overcome the fifth wave, with 57% expecting revenue will largely remain the same as normal or grow in the next three months.

Meanwhile, 42% of respondents believe that the relaxation of social distancing restrictions will have the most positive impact on their SME in the next three months, followed by the Employment Support Scheme (18%) and Consumption Voucher Scheme (12%).

Lastly, when asked which areas of their business were most negatively impacted by the fifth wave, over one-third (35%) nominated business operations, followed by cash flow (26%).

Janssen Chan, chairperson of CPA Australia’s SME Committee for Greater China said, “We are aware that many small businesses are suffering during the fifth wave of COVID-19, but they are also demonstrating resilience and adaptability during this period.”

He added, “The pandemic is a major catalyst for transforming business models and consumer spending patterns. In Hong Kong, more consumers are purchasing online and using digital payments. With social distancing restrictions set to relax from mid-April and the roll-out of stimulus measures such as the e-consumption vouchers, small businesses should continue innovating, digitalising and updating their business plans to ensure they are best placed to rebound in the second half of 2022.”

There was also an increase in the number of local businesses that found their investment in technology in 2021 improved their profitability (40% in 2021 compared with 25% in 2020). Revenue generated from e-commerce also increased. Over half (53%) generated more than 10% of their revenue from e-commerce in 2021, the highest result for the city since 2017.

“Although Hong Kong small businesses overall may still fall short of the survey average in technology adoption, another positive to emerge from the 2021 results was that more small businesses embraced digital transformation. This bodes well for the future with the survey results showing that high growth small businesses are significantly more likely to be using digital technologies in many aspects of their business,” Chan concluded.

Manila, Philippines – In a bid to aid the growing number of food-related small businesses in the Philippines, Grab Philippines has launched a new program called ‘Indie Eats’, which aims to help merchant-partners amplify their presence on GrabFood and bring their offerings to the spotlight.

‘Indie Eats’ hosts a full roster of small and local merchant-partners that are perfect for every craving. Whether you’re looking for refreshing mango coolers to beat the heat from ‘Mango Series’, the hearty and comforting taste of lugaw (rice porridge) from ‘Lugaw ni Pinggoy’, or a quick bite of your favourite pastries from ‘Panaderia Pantoja’, Grab has you covered with its range of merchant-partners.

With Indie Eats, Grab hopes to provide assistance to their vast community of small and local merchant-partners. Those interested to onboard can partake in Grab’s upskilling seminars, providing training in building their brand and menu. This ensures that merchant-partners are able to improve their brand every step of the way. 

All in all, the program also aims to inspire its merchant-partners to become the best brands they can be, and be on their way to exciting more consumers with their offerings.

Martin Luchangco, head of merchants and partnerships at Grab Philippines, said, “At Grab, we are always ready to provide support to our merchant-partners to ensure they are able to meet success and have a rewarding experience on our platform; in particular, small food businesses hold a lot of potential not just in Grab but in our local food industry as a whole. Indie Eats is just one of the many ways we want to help them in being discovered by more Filipinos, and reach success with us.”

Islamabad, Pakistan – The State Bank of Pakistan (SBP) has announced the launch of a challenge fund for local small-and-medium enterprises (SMEs). According to their latest circular, SBP instructs local banks to develop innovative technological solutions to cater the banking needs of the SME sector. In addition, this will also enable the SME sector to increase the access and usage of digital financial services.

Said challenge fund will be focusing on developing SME banking solutions, digital payment solutions for SMEs, developing e-commerce or online marketplace, and digitising loans application and credit management.

The grant size will be determined according to the financing requirements of the proposal under consideration. However, each grantee will contribute 15% of the total cost. Depending upon the quality and innovations of the proposal, the grant size can vary, however one bank will get only one grant. 

The duration of the projects to be implemented through CFS grant should not exceed 8 months.

In addition, commercial banks–both conventional and Islamic, are eligible to apply for grants under the fund. Banks can also apply in partnership with non-banking financial Institutions (NBFIs), fintechs, electronic money institutions (EMI) and software houses. However, lead responsibility will rest with the applicant bank.