Financing Singapore’s SMEs and the crowdfunding industry in Singapore

• Main Authors: TAN, Swee Liang, TOK, Yoke Wang, CHANSRINIYOM, Thitipat
• Format: text
• Language: English
• Published: Institutional Knowledge at Singapore Management University 2019
• Subjects: International Economics
• Online Access: https://ink.library.smu.edu.sg/soe_research/2318; https://ink.library.smu.edu.sg/context/soe_research/article/3317/viewcontent/1._Chapter_3__4_Nov__Final_.pdf
• Institution: Singapore Management University

As new digital technologies emerge that make the provision of financial services more efficient, they hold the potential to address barriers that SMEs face in accessing credit. This paper found empirical evidence that crowdfunding improved SMEs’ timeliness to pay debt. Anecdotal evidence from SMEs suggests that getting crowdfunding loans also induced financing from banks. In just four years, Singapore’s crowdfunding volumes have grown rapidly to make it the top crowdfunding hub in Southeast Asia. The rapid development of Singapore’s crowdfunding industry can be attributed to its higher GDP per capita, higher level of financial sector development and greater availability of venture capital. Our results suggest that policies do matter to the development of the crowdfunding industry. The paper concludes with a discussion on the implications of crowdfunding on the future of banks and Singapore’s approach to regulating crowdfunders.