AIRWALLEX SURVEY: SINGAPORE SMES BRACE FOR POTENTIAL RECESSION WITHIN 2 YEARS

KUALA LUMPUR, April 13 (Bernama) -- A new survey from global fintech Airwallex revealed seven in 10 small and medium-sized enterprises (SMEs) in Singapore are bracing for a potential recession within the next two years.

The independent research considered the challenges SMEs in Singapore would face amid the current economic uncertainty, how they would get around them, and how fintechs could support their future growth.

“The challenges identified by SMEs in the survey findings are consistent with what we have been hearing from our customers, with rising costs and ways to manage it being a consistent theme in conversations,” said Airwallex Director, SME and Growth, Singapore, Low Cher Hao.

According to a statement, rising costs are among the top three pain points for two-thirds of Singapore SMEs. Rising costs from suppliers (35 per cent) accounts for the highest rise in business cost, followed by employee costs (30 per cent) and logistical disruption costs (23 per cent) likely due to the pandemic.

To optimise their operations amid an increasingly uncertain environment, SMEs are taking a prudent approach to their financial spending, with nearly two-thirds looking to reduce business spending and/or optimise operations through technology in the next six-12 months.

In addition, improving efficiency (42 per cent), growing revenue (40 per cent), and market share (33 per cent) were the top three priorities for SMEs surveyed.

While SMEs continue to maintain a high level of confidence in traditional banking providers, the survey found that 93 per cent of businesses in Singapore hold a high level of trust in fintech and digital platforms to support their business activities.

More than nine in 10 SMEs have already adopted or are planning to adopt digital or fintech solutions to support their businesses' financial needs, with benefits include saving time (58 per cent), ease of access (50 per cent) and greater control over transactions (48 per cent).

The survey found that nearly two-thirds (64 per cent) of SMEs plan to expand their business overseas in the next 12 months with Southeast Asia remains a top expansion region, and top five favoured markets for expansion are Malaysia, the Netherlands, Indonesia, Vietnam and the Philippines.

The survey from Airwallex was carried out by Censuswide from March 16 - 23, among 255 SME business decision makers in Singapore.

-- BERNAMA