Credit Brief on Singapore SMEs Q3 2020
This is a quarterly report jointly published by the CRI at the Risk Management Institute of National University of Singapore and Validus Capital. Read the full report here →
Overall, the NUS-CRI 1-year PD decreased during Q3 2020, from 35.41bps in June to 30.63bps in September. The credit profile of Singapore SMEs improved despite the yearly GDP contraction of 7% in Q3 2020 based on advance estimates from the Ministry of Trade and Industry (MTI).
According to the survey conducted by the Singapore Business Federation and DP Information Group, the business optimism of Singapore’s SMEs has declined due to uncertainties arising from the COVID-19 outbreak and restrictions to slow the virus’ spread. The Retail/ F&B sector has the most pessimistic outlook compared to the other sectors as their business operations have been severely disrupted and restrictions are set to continue for the foreseeable future.
To mitigate the impact of the pandemic-induced economic downturn, the Singapore government has set aside approximately SGD 100bn to tide Singapore through the COVID-19 crisis.
Despite the support measures, SMEs across most sectors remain cautious as the COVID-19 continues to adversely impact the global economy. Companies are therefore urged to reinvent themselves and strategically position their business for the eventual post-COVID-19 recovery.