Reply to Parliamentary Question on SME Loans

QUESTION NO 653

NOTICE PAPER 424 OF 2013

FOR WRITTEN ANSWER

Date: For Parliament Sitting on 11 November 2013

Name and Constituency of Member of Parliament

Mr Yee Jenn Jong, NCMP

Question:

To ask the Prime Minister in 2012 (a) what percentage of total business credit goes to small and medium-size enterprises (SMEs) in Singapore in comparison to Germany, Japan, South Korea and Taiwan; (b) what percentages of financial institutions' stock of total outstanding SME loans are owed by SMEs with turnover above $30 million, between $1 million and $30 million, and below $1 million; (c) what percentage of the total stock is mortgage equity withdrawal loans; and (d) what is the estimated total stock of capital invested in SMEs by venture capital, private equity and angel investors.

Answer by Mr Tharman Shanmugaratnam, Deputy Prime Minister and Minister in charge of MAS:

1   Small and medium-sized enterprises (SMEs) accounted for 27% of total business credit extended in Singapore in 2012.1 This is slightly higher than in many of the advanced countries, such as France at 21%, Italy (18%), the UK (20%), Canada (18%) and the US (26%).2 However, it is lower than in Taiwan (50%), Japan (67%), and South Korea (76%).3

2   The differences across countries in the shares of SMEs in overall credit have to be interpreted in the context of different definitions of SMEs in each country. Further, different overall credit shares for SMEs do not necessarily mean different degrees of access to credit for SMEs. For example, large corporations in some countries may rely more on funding from the capital markets and therefore account for a smaller share of bank lending.

3   15% of SME loans were mortgage equity withdrawal loans secured on residential property collateral.

4   We do not have data on credit extended to SMEs broken down by size. There is also no hard data on the total stock of capital invested in SMEs by private equity, venture capital and angel investors.

5   The availability of bank funding for SMEs should also be viewed in the context of the various government-financed schemes for SMEs.  SPRING Singapore offers a range of financing schemes to cater to SMEs of different sizes - the Local Enterprise Financing Scheme is available to local SMEs with sales turnover of not more than $100 million, while the Micro Loan Programme targets small SMEs with turnover not exceeding $1 million. SPRING also provides schemes, such as the Angel Investor Tax Deduction Scheme, to encourage investments in local companies.

***

1 Source: MAS 2013 SME Financing Survey

2 Source: OECD Financing SME and Entrepreneurship 2013 Scoreboard.  Data is for 2011.

3 Estimates sourced from Bank of Japan, Bank of Korea, CEIC and Financial Supervisory Commission (Taiwan).  The European Central Bank and German central bank do not publish data on the amount of bank loans to SMEs. Data is at end-2012.
Last Modified on 26/11/2016