ABSTRACT
Small and medium-sized enterprises (SMEs) represent one of the backbones of the Singapore economy. SMEs contribute about 40% of the gross domestic product (GDP), provide about three-quarters of the workforce, and constitute about 90% of firms in Singapore. The lack of access to financing appears to be one of the key barriers to SMEs’ survival and growth. Credit guarantee schemes are a policy tool that countries in various parts of the world use to remove the barriers, in particular with regard to collateral requirements and risk mitigation, and help SMEs to survive and grow. Singapore does not currently offer a public credit guarantee scheme (CGS), contrary to many other Asian economies. Various recently introduced credit support schemes include the SME Micro Loan and SME Working Capital Loan, and several multinational agencies have also backed two private, recently established credit guarantee schemes, GuarantCo and the Credit Guarantee and Investment Facility. The chapter discusses the importance of the development of public CGSs to address the gaps in SME financing in Singapore, sheds light on the existing schemes for SME financing in the country, and finally provides policy recommendations concerning the creation of a government credit support program in Singapore.
