Singapore’s SMEs missing out on S$800m annually due to idle cash

Over 2 in 5 keep their cash idle in deposits and bank accounts.

Singapore’s small and medium enterprises (SMEs) are estimated to be missing out S$800m annually by keeping cash idle in low-yield bank accounts, estimates Syfe.

A recent survey of 350 SMEs by the wealth management platform found that nearly half (48%) prioritise guaranteed returns and liquidity (45%).

However, many of the SMEs rely on traditional banking solutions that leave “significant value untapped.”

Amongst strategies that SMEs subscribe to for cash management include money market funds (43%), standard business bank accounts (43%), and fixed deposits (41%).

On average, Singapore SMEs have fewer than 11 months of cash reserves to sustain operations during periods of poor performance.

This data underscores the difficulties SMEs face in optimising their cash reserves, said Jack Prickett, Chief Commercial Officer at Syfe.

“Many businesses are operating with limited financial buffers while external pressures continue to mount,” Prickett said.

The study came in tandem with the recent launch of Syfe’s new product, Syfe Earn. Launched in partnership with Wallex, Syfe Earn is a cash management solution for SMEs offering returns of up to 3.5% and no minimum lock-in period.

The survey polled 350 SME business owners aged 25+ in Singapore, with S$100,000 to S$20m in cash reserves, to analyze how they manage their idle cash reserves and the financial challenges they face in doing so.