Blog

AMID a rapidly evolving business landscape, South-east Asia’s small and medium-sized enterprises (SMEs) face both significant challenges and unprecedented opportunities.

With its robust presence across eight of the region’s 10 markets, UOB is uniquely positioned to help these businesses navigate the complexities of scaling up, connecting with the right partners and tapping into new markets.

“To build businesses and grow operations, SMEs need to build the right connections, not just within their domestic markets, but also with the rest of the Asean region,” said Kavita Bedi, the head of group business banking at UOB.

Given South-east Asia’s fragmented geopolitical landscape and disrupted supply chains, many companies there are reassessing their sourcing and production strategies.

As a result, an increasing number of them are looking to diversify their operations into the region’s rapidly expanding consumer markets, creating “tremendous opportunities” for the SMEs here, said Bedi.

Survival tips

SMEs represent more than 90 per cent of businesses in South-east Asia. Even though they form the backbone of many economies in Asean, they face significant challenges at each stage of their development.

The starting journey is never easy, with Bedi noting that “one in three businesses actually fail in their first year of operation”.

“Hence, it is imperative that startups first prioritise clarity of their business model,” she added.

She encourages these companies to have a very clear understanding of their target audience, ensure product-market fit and develop a compelling value proposition.

Bedi pointed out that access to banking products and solutions is an immediate need for startups, alongside the need for robust financial planning.

“Financial mismanagement is one of the main causes of business failure”, she said, adding that startups must manage their cash flow effectively and choose a financial partner that truly understands their needs and supports their growth journey.

Common pain points

Over the course of their growth, SMEs face a few pain points. Citing the business outlook study that UOB conducts every year, Bedi highlighted three recurring issues common to SMEs – whether they are locally focused companies or have overseas growth ambitions.

First, SMEs face challenges streamlining operations for efficiency. Second, they encounter difficulties in finding the right partners to work with. And third, they lack access to financing.

This is where UOB fits in – by connecting SMEs to financing and non-financing solutions that they need for growth.

In the area of operations, SMEs can scale up through digital transformation, by leveraging UOB’s digital platforms.

For instance, with UOB BizSmart, SMEs can streamline financial management and payroll by integrating finance and payroll data via the bank’s chosen digital partner solutions.

UOB has partnered more than 50 digital business solution providers across the region to empower businesses to adopt cost-effective and scalable solutions.

“To date, we have enabled more than 48,000 SMEs to digitise for efficiency, manage costs and drive growth,” said Bedi.

In terms of partnerships, UOB facilitates network building opportunities – such as hosting business networking events and providing access to mentorship and coaching opportunities – to connect SMEs to industry peers, business and partner networks, as well as potential collaborators.

As for financing, the UOB SME app facilitates instant account opening, loan applications and even allows SMEs to keep track of and secure foreign exchange rates.

Supply chain management is another emerging pain point. “Many SMEs rely on a limited number of suppliers, which leaves them vulnerable to disruptions (such as) price shortages, and even logistical delays,” noted Bedi.

In this regard, UOB’s integrated supply chain management platform enables businesses to sync their entire value chain for a comprehensive view of their trade and cash position across borders.

Embracing sustainability

Bedi highlighted the growing focus on sustainability as a key business trend for SMEs.

“SMEs that adopt sustainability and decarbonisation practices are gaining access to new client segments and forging global partnerships.”

She added that multinational corporations are increasingly prioritising SMEs with decarbonisation goals, integrating the companies into their supply chains as a commitment to their sustainable operations.

UOB supports SMEs on their journeys towards sustainability through the UOB Sustainability Compass which empowers these businesses with a step-by-step guide, customised reports and a road map to kickstart their sustainability journeys.

UOB also offers decarbonisation solutions, such as U-Drive, U-Solar and U-Energy, which SMEs can leverage to manage their carbon emissions.

With a suite of financing and non-financing solutions, Bedi believes the bank can help SMEs tide over the three most powerful tailwinds of today – digitalisation, connectivity and sustainability.