Small businesses across ASEAN are counting on technology to help them overcome the impact of the COVID-19 pandemic on their operations. Technology ranked the top investment priority for 2020 by two in three (64%) small businesses, including those who currently have cash flow concerns. This is according to a recent survey of 1,000 ASEAN small businesses conducted by United Overseas Bank (UOB), Accenture and Dun & Bradstreet.
Across ASEAN, Thailand had the highest proportion (71%) of respondents prioritising technology investments in 2020, followed by Indonesia (65%), Vietnam (63%), Singapore (60%) and Malaysia (59%). The survey also found that small businesses across ASEAN are persevering in their efforts to invest in technology even when faced with the prospect of declining revenue.
Lawrence Loh, Head of Group Business Banking, UOB, said, “The unprecedented economic, business and social impact of the COVID-19 outbreak has underscored the importance of technology for many small businesses across the region. Having had to cope with the disruption to their operations because of COVID-19, many of these firms realised quickly that technology could make all the difference to their business.”
By industry sector, small businesses from the food and beverage, information and communications technology and healthcare sectors indicated the strongest desire to boost their technology investments, followed by those in construction and retail trade. Small businesses recognise that technology can help them better manage their cash flow.
Divyesh Vithlani, who leads Accenture’s financial services practice in Southeast Asia, said, “As more small businesses prepare to reopen after a very challenging period, their focus on technology will further intensify as they look to reinvent themselves to ensure long-term competitiveness and resiliency.”
ASEAN small businesses are also easing their cash flow pressures by seeking deferment on their loan repayments and renegotiating the terms of their contracts with suppliers and landlords. Small businesses also look to increase their working capital through COVID-19-related financing schemes.
In Malaysia, governments and banks provided relief measures and offered immediate assistance to businesses affected by the outbreak of COVID-19. Such industry-wide initiatives include moratoria on loan repayments and waivers of compounding interests on loans during the moratorium period.
Given the current business challenges, UOB Malaysia is also reviewing SME customers’ financial health to provide, on a case-by-case basis, additional working capital financing facilities or access to the Government Guarantee Scheme – Prihatin (GGS-Prihatin).
The full survey findings are available in the ASEAN SME Transformation Study 2020. The study aims to help ASEAN small businesses understand how they can transform their businesses to adapt to the changes ahead and to participate in the region’s long-term growth.