Unlocking the Potential of our Community’s MicroSMEs for Economic Upliftment

In my work as a business advisor, I have the privilege of meeting inspiring examples of ordinary people from our community who have become ‘accidental entrepreneurs’. Take for example Rahmah (not her real name), a baking expert. A decade ago, she was working as an administrative staff. However, she is passionate about baking and took baking orders on the side from friends and family. What was a side-line eventually grew into a full-time, homebased baking and training enterprise. When I met her three years ago, she was already enjoying $10,000 in monthly sales. She has since hit $20,000 in monthly average sales and decided recently that it was time to set up her own shop in a commercial space. Her husband recently joined her business as a partner.

Our community can do with more inspiring examples like her. Consider the following statistics:

  • A Malay family’s average monthly household income is under $4,000. Although it has been improving over the years, it is still the lowest among other communities.
  • 2 in 3 of our Malay workforce are non-PMETs, the segment whose employability is expected to be hardest hit in our disruptive economy.
  • 1 in 2 Malay mothers are economically inactive.
  • Malays have the highest Total Dependency Ratio compared to other communities. In other words, we support the highest number of dependants: those below 14 and above 65 years old.
  • Only 6% of Malays are employers or own account workers. It is the lowest compared to other communities and less than half of the national average of 14%.

There are about 134,000 Malay households in Singapore as at 2015. Imagine the impact a Rahmah (or Rahmat) in more Malay families will have. Even an additional modest income of $2,000 a month can be significant. This is why I believe that in today’s world, entrepreneurship presents an exciting opportunity for us to economically uplift our community’s performance.

In Singapore, 99% of registered businesses are Small Medium Enterprises (SMEs), defined as earning less than $100 million annual sales or with fewer than 200 employees. However, 70% of these SMEs are in fact micro Small Medium Enterprises (mSMEs), defined as businesses that earn less than $1 million in annual sales.

The population of micro-entrepreneurs will be even larger if we are to include informal, unregistered businesses. These comprise home-based businesses, freelancers in a growing gig economy and the self-employed. While there are no official figures on the number of unregistered home-based businesses, we can reasonably assume that it is a 6-figure number. Gig workers already form 170,000 or 10% of Singapore’s resident workforce and this looks set to grow, while self-employment numbers have remained steady at 8-10%1.

Seen from this perspective, there is therefore a large group of people involved in some form of micro business and entrepreneurial work. Coupled with employability challenges that non-PMETs face, efforts to develop the growth of mSMEs offer much potential and interesting possibilities for real economic growth.

The Singapore government has been active in rolling out SME assistance programmes – there are more than 200 at last count. However, it lacks a targeted approach and may not be as helpful to mSMEs. Indeed, it has been observed that the larger SMEs tend to benefit more from such assistance schemes than mSMEs2.

This is not surprising as the challenges and needs of mSMEs are different from the larger SMEs. For instance, rising costs, manpower constraints and low productivity may be the main concerns for larger SMEs and certain industries, but this is not usually the case for mSMEs.

In fact, in a disruptive and technology driven economy, a smart mSME can leverage on Lean Enterprise business practices – such as working from a home, shared or virtual office, tapping on free technology tools, using social media and Software as a Service (SaaS) – to dramatically reduce business costs. There are more opportunities than ever before for a small business to thrive.

It is a fact that a majority of mSMEs fail within the first few years. SPRING, for example, found that 50% of mSMEs in the F&B industry fail in less than 5 years. This is because mSMEs have little room for error – poor planning, cashflow or sales and unwise decisions can kill a business.

Instead, there are two needs mSMEs have. Firstly, mSMEs need to continuously arm themselves with the right knowledge. In our post-industrial Knowledge Economy, those with the right knowledge can punch above their weight. It is truly amazing how easily we can get information online to help us solve any business headache we have if we are curious and patient enough. Here is a quick illustration:

Business Needs New Economy Solutions
1. Marketing Be online – Social Media and E-Mail Marketing are effective and virtually free. WhatsApp Business works well too – and is free.
2. Graphic Design DIY tools such as Canva.com and Spark.Adobe.com are superb – and free.
3. Website You no longer need to spend thousands – you can build your website quickly with Wix.com or Weebly.com for free.
4. Accounting WaveApps or Xero are cloud-based, convenient and free or at minimal cost.
5. Talent Hire a freelancer from global online marketplaces such as Fiverr.com or Upwork.com to do anything from video production to social media management to virtual assistance services and more.
6. Capital Crowdfunding can help.

Secondly, mSMEs need the right guidance to help them shorten the learning curve. It is not unusual for me to have a consultation session with mSMEs and have them leaving with knowledge that immediately stops them from making expensive mistakes. A strong business mentoring culture can also help – this is where successful business people lend their wisdom and experience to guide and encourage mSMEs. We are sorely lacking this in Singapore.

In general, mSMEs simply have limited resources of time and money that they can afford to waste. They need useful, timely, practical and affordable support to help them survive and eventually thrive.

I have found that if mSMEs pay close attention to the following five areas well, they will find surer footing and stand a good chance to eventually grow their business. Briefly, these areas are Masterplan, Mindset, Marketing, Money and Management. No government assistance scheme, however well-intended, can help if these basics are not managed well. This was why the generous
Productivity and Innovation Credit (PIC) grants did little to help mSMEs perform better despite a high take-up rate. Our aim should be to support the growth of entrepreneurs, not ‘grantrepeneurs’.

At the other end of the spectrum, while SkillsFuture Singapore (SSG) offers generous subsidies for wide-ranging training programmes, it is mainly catered to serve employee-types. A number of SSG training programmes can help mSMEs run their business better – but there are no practical business programmes tailored to meet the specific needs of mSMEs.

We are blessed to have a range of caring Malay/Muslim Organisations (MMOs) focused on the progress of our community. MMOs such as AMP, PPIS and the Singapore Malay Chamber of Commerce & Industry (SMCCI) have rolled out limited programmes over the years to guide mSMEs. MENDAKI, with its ample resources, have tended to focus on children, families and employability training with limited attention given to support mSMEs. However, given the major disruptions happening in these times, there is an urgent need to do so much more to nurture an enterprising spirit among our people.

In short, given that government assistance schemes are less useful to mSMEs and that SSG training is more suited for employees, I would argue that there is a gap in providing effective support for mSMEs. In addition, our MMOs can go further to nurture the development of our Malay/Muslim mSMEs.

To offer effective support, we should recognise that different mSME profiles face different challenges, and therefore require different solutions. Based on my observations of our Malay/Muslim mSMEs, and as a starting point, we could map the situation as follows:

mSME Profile Challenges
1. Home-Based Business
  • Lack of basic business knowledge
  • Lack of confidence
2. Traditional Business
  • Lack of Vision
  • Lack of modern business knowledge & practices
3. Start-Up (0-3 Years)
  • Lack of practical business knowledge & experience
  • Lack of moral support
4. Technology Start-Up
  • Lack of industry mentors & social capital
  • Lack of funding
5. Self-Employed
  • Lack of practical business knowledge & experience
  • Lack of social capital

Seen from this perspective, it becomes clearer that a separate set of solutions should be tailored for the needs of each segment. In our current economy, the best support we can give to encourage mSME growth in a world of disruption is to provide a powerful combination of the right knowledge, guidance and moral support.

It is exciting to witness what happens to our community’s mSMEs when they gain knowledge to fix their business challenges, get sincere guidance that works and moral support to encourage them along their journey. They feel empowered, gradually grow in their understanding of business and enjoy better results. Most importantly, they feel good that their family is proud of them.

I would like to conclude by offering this suggestion to our MMOs and community leaders: set up a quadripartite alliance of MENDAKI, SMCCI, other MMOs and private sector practitioners to coordinate our efforts to help develop our Malay/Muslim mSMEs. We need to come up with simple, innovative solutions by taking advantage of existing resources such as the Malay/Muslim Community Development Fund (MMCDF) and government assistance schemes to come up with targeted help to address the specific needs of each mSME profile outlined earlier.

In a recent speech at the 2018 Committee of Supply debate3, Dr Yaacob Ibrahim, Minister-in-Charge of Muslim Affairs said:
We cannot truly say that we have arrived, until we have paved the way for all those around us to succeed. Only then will our entire community succeed. It is our collective responsibility to ensure that no one gets left behind.

I cannot agree more. Supporting the development of our micro Small Medium Enterprises can bring significant economic upliftment to our Malay/Muslim community – and should therefore be on our collective community agenda.

Let us come together and work on truly effective solutions. The wins of our Malay/Muslim mSMEs is our community’s win, and ultimately, Singapore’s win.

Let us begin the dialogue.


Harasha Bafana runs the Adam & Hawa Network, where she helps SMEs get the right knowledge to grow their business without making expensive mistakes. She was Centre Director of SME Centre @ SMCCI and is a Board Member with the Agri-Food & Veterinary Authority.


1/ http://www.straitstimes.com/business/economy/gig-workers-get-their-due
2 https://www.channelnewsasia.com/news/singapore/commentary-government-assistance-smes-business-budget-2018-9950140
3 https://www.mccy.gov.sg/en/news/speeches/2018/mar/stronger-together-forging-ahead-towards-the-future.aspx

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