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SME Financial Access in Singapore and Indonesia

9 February 2023

, posted by 

Aldean Moch Rafli

SME Financial Access

Small and medium-sized enterprises (SMEs) play a crucial role in driving economic growth and job creation in Singapore and Indonesia. However, despite their importance, many SMEs in these countries face significant challenges when it comes to accessing financial services and tools. SMEs and micro enterprises have traditionally been ignored by big banks due to the lack of credit data and perceived risk. We will explore the difference in financial access for SMEs in Indonesia and Singapore as well as how alternative lending solutions can help these businesses to build, run, and grow.

Singapore SMEs Access to Finance

In Singapore, SMEs have relatively good access to financial services and tools. According to a report by the Monetary Authority of Singapore (MAS), SMEs in Singapore have access to a wide range of financing options, including bank loans, trade financing, and equity financing. However, SMEs in Singapore still face challenges in accessing funding from traditional lenders. Business owners in Singapore still rely on funds from friends and family as well as personal funds.

Challenges for Singapore SMEs

The reasons SMEs face difficulty in getting funding is due to weak cashflow, difficult application process, rigid lending criteria, lack of business plan and collateral requirements. Therefore, even though SMEs have access to financial services and tools, there is still a large barrier to get the funding they need to start and grow their businesses.

Indonesia SMEs Access to Finance

In Indonesia, however, SMEs face significant challenges when it comes to accessing financial services and tools. According to a report by the World Bank, only 25% of SMEs in Indonesia have access to formal credit. This lack of access to credit makes it difficult for SMEs to start and grow their businesses. The report also states that the SME financing gap in Indonesia is estimated at $60 billion, which is a significant challenge for the country’s economic growth.

Challenges for Indonesia SMEs

Indonesian SMEs face similar challenges in financial access even with the support of the government to push for SME funding from the banks. The financing challenges experienced by SMEs are caused in part by a lack of financial reporting as the main tool used by financial institutions to evaluate creditworthiness. 

Alternative SME Loans Solutions

Alternative lending platforms, such as peer-to-peer lending and crowdfunding, are also providing SMEs with access to credit and investment in both countries. These platforms provide a more efficient and cost-effective way for SMEs to access financial services, as they bypass traditional banking intermediaries and reduce the time and costs associated with obtaining a loan.

Fazz Provides Alternative SME Loans Solutions

Fazz can accelerate your business with ready-to-access working capital. Fazz offers loan interest rates as low as 0.05% with approval within 48 hours. We believe in providing access to capital for businesses of all sizes in Singapore and Indonesia. Apply for a Business Loan here to build, run and grow your business with peace of mind today.

The financial access landscape in Singapore and Indonesia is different, with Singapore’s SMEs having relatively good access to financial services and tools, while in Indonesia, SMEs face significant challenges when it comes to accessing financial services and tools. However, beyond the availability, SMEs still face financial access challenge when actually applying for the loans. With the growth of digital financial services and alternative lending platforms, there are opportunities for SMEs in both countries to access the financing they need to build, run, and grow their businesses.


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