The Enterprise Financing Scheme (EFS) for SMEs was launched by the Singapore government to help small and medium-sized enterprises (SMEs) access affordable financing. Since its inception, the scheme has undergone several changes and updates to better serve the needs of SMEs. In this article, we will explore the latest trends and developments in the Enterprise Financing Scheme (EFS) for SMEs.
Expansion of eligibility criteria
In the past, only companies with a certain level of revenue and creditworthiness were eligible for the EFS. However, there has been a recent trend towards expanding the eligibility criteria to include more SMEs. For example, in June 2020, the government announced that micro and small enterprises with a turnover of less than SGD 10 million would be eligible for the EFS. This move has enabled more SMEs to access affordable financing and has helped to boost economic growth.
Digitisation of the EFS application process
Traditionally, applying for financing under the EFS involved a lengthy and cumbersome application process. However, there has been a recent trend towards digitising the application process, making it more streamlined and efficient. For example, some financial institutions now allow SMEs to apply for financing online, using a simple application form. This has made it easier for SMEs to access financing quickly and has helped to reduce the administrative burden on financial institutions.
Introduction of new financing options
The EFS has evolved over the years to offer a wider range of financing options to SMEs. For example, in April 2021, the government introduced the Enterprise Financing Scheme – Venture Debt Programme (EFS-VD), aimed at supporting high-growth startups in Singapore. Under this programme, participating financial institutions provide loans to startups with a minimum revenue of SGD 500,000 and a minimum equity funding of SGD 1 million. This new financing option has helped to fill a gap in the market for startups that require debt financing to fuel their growth.
Increased focus on sustainability
There has been a growing trend towards sustainable finance in recent years, with investors and lenders placing greater emphasis on environmental, social, and governance (ESG) factors. The EFS has responded to this trend by introducing the Sustainability-linked Loan (SLL) programme in October 2020. Under this programme, SMEs can access financing with interest rates linked to their ESG performance. This has encouraged SMEs to adopt more sustainable business practices and has helped to promote sustainable economic growth.
Enterprise Financing Scheme (EFS) for SMEs has undergone several changes and updates in recent years, reflecting the evolving needs of SMEs and the wider economic landscape. These trends and developments have enabled more SMEs to access affordable financing, streamlined the application process, introduced new financing options, and promoted sustainable finance. If you are an SME looking to access financing, or a financial institution looking to participate in the EFS, it is important to stay up-to-date with the latest trends and developments in the scheme. You can find out more by visiting the Enterprise Singapore website or speaking to a participating financial institution.
