BY KOH HUI THENG

SMALL and mediumsized enterprises (SMEs) the world over face two perennial challenges - getting financing and finding talent to run the companies.

But Singapore has done well, with various government schemes in place to help home-grown small businesses grow and weather the economic downturn, said Asian Development Bank's (ADB) chief economist, Dr Lee Jong Wha.

Presenting ADB's annual key indicators for Asia and the Pacific at the Institute of Southeast Asian Studies yesterday, Dr Lee said: 'Singapore offers examples of how Asian governments can help small enterprises grow and boost the overall economy.'

Nurturing SMEs is vital in growing a large Asian middle class, which would drive consumption, said Dr Lee.

Though SMEs typically employ fewer than 200 people, they hire 50 to 90 per cent of the local workforce across the Asia-Pacific.

In Singapore, six in 10 people work for SMEs. According to the Department of Statistics, the 161,000 SMEs here contribute almost half of the country's gross domestic product.

One way for SMEs to prosper is to expand their talent pool.

While many SMEs in Singapore tend to be family-run businesses, relying on family expertise alone can limit the firm's growth, said Mr Inderjit Singh, Member of Parliament for Ang Mo Kio GRC and the deputy chairman of the Action Community for Entrepreneurship.

His suggestion: Incorporate talent from outside the family.

Mr Singh cited the example of home-grown brand Eu Yan Sang, which has successfully transformed itself from a small Chinese-medicine hall into a global health-care player. The Build programme, administered by Spring Singapore, also gives SMEs a leg up by sharing 70 per cent of the costs incurred when a firm upgrades its operations, he added.

The tough economic conditions have thrown up opportunities for SMEs, said Mr Lawrence Leow, president of the Association of Small and Medium Enterprises.

He said: 'It is a buyers' market in a downturn - good investments can be made at a lower cost and quality assets can be acquired at bargain prices.'

And venturing beyond traditional markets overseas is another option that SMEs should seriously consider, said Mr Andrew Ng, managing director of furniture firm Kiat Lee Industries, which has expanded its business to non-traditional markets such as Brazil.

For more my paper stories click here.