| Hakim Hayat |
A FAST-CHANGING environment tied with the ever-increasing digitalisation of economies across the globe means that small and medium enterprises (SMEs) need to adapt quickly and be more agile to capture new opportunities and widen their reach.
The Minister of Home Affairs Pehin Orang Kaya Seri Kerna Dato Seri Setia (Dr) Haji Awang Abu Bakar bin Haji Apong highlighted this point in his keynote address while opening the International Banking Conference 2017 (IBC 2017) at The Empire Hotel & Country Club in Jerudong yesterday as guest of honour.
The minister, who is also Deputy Chairman of the Autoriti Monetari Brunei Darussalam (AMBD), said that SMEs today continue to face headwinds of challenges such as access to finance, changing market demands and evolving regulatory regimes, all of which require them to be more responsive to changes.
He said one solution to overcoming these barriers is the digital economy; a result of an increasingly digitised world which has brought about new business models which SMEs can leverage and capitalise on. “On market access and global value chains, the digital economy substantially lowers costs and barriers to markets and customers. This can help SMEs increase their sales and exports,” the minister added.
On access to finance, he said the digital economy enables new financing models such as crowdfunding and peer-to-peer lending, giving SMEs a plethora of financing options. The digital age also offers new solutions to constraints – such as limited availability of managerial and specialised skills – through online courses and platforms, the minister said while noting his strong belief that digitalisation is a major driver of future competitiveness and innovation for SME development.
Minister of Home Affairs Pehin Orang Kaya Seri Kerna Dato Seri Setia (Dr) Haji Awang Abu Bakar bin Haji Apong delivering his keynote address. – PHOTOS: DEAN KASSIM
Professor Dr Sumil Agarwal, one of the invited international experts, delivering a special talk
Attendees at the International Banking Conference 2017 (IBC 2017) at The Empire Hotel & Country Club in Jerudong
He also said that SMEs today can leverage on non-traditional forms of financing for their growth, such as Islamic finance. “The foundation of Islamic finance is structured on strong ethnical values relying on both economic and social factors. It emphasises the importance of financial inclusion in the form of servicing society’s unbankable customer segment, which includes SMEs,” he stated.
He noted that over the years, the Islamic financial system has evolved into a comprehensive financial system of its own, encompassing areas ranging from traditional banking and capital markets to the Takaful segment which SMEs can tap into, adding that with its emphasis on asset-backed financing and risk-sharing features, Islamic finance is well-suited for the financing of SMEs and startups.
The minister noted further that fostering growth in Brunei Darussalam’s SME sector remains high on the government’s policy agenda, and several measures have been taken to promote its growth, including the establishment of DARe (Darussalam Enterprise) to nurture and support local enterprises across all stages of development, and also the establishment of a Syariah-compliant SME Bank which will not only improve access to finance for local SMEs, but also promote Islamic Muamalah which will help in developing the finance industry in the country.
Recognising the importance of unleashing the potential of SMEs, the minister said AMBD will continue to collaborate with relevant stakeholders to ensure a conducive environment for their development.
“At the same time, it is paramount for SMEs to initiate their own measures to complement those undertaken by the government. SMEs must possess the agility to adapt to changing conditions, as well as perseverance and entrepreneurial skills to enable them to ride though the near-term challenges. This will allow them to grow and enhance their contribution to our economy, thereby supporting the country’s efforts to grow and diversify the economy,” he advised.
The IBC 2017, organised by the Centre for Islamic Banking, Finance and Management (CIBFM) in association with the Brunei Association of Banks and AMBD, will be attended by more than 100 participants including financial regulators, industry players and locals SMEs.
The conference, with the theme “Future Development of SMEs – Unlocking the Potential”, is meant to be a platform for local SMEs and financial institutions to share their experiences and provide new perspectives – especially from the standpoint of SME development in the Asean region, and also to promote Brunei as a prominent knowledge hub.
A number of local and international experts from Hong Kong, Indonesia, Malaysia, Singapore and USA were invited to speak at the conference.
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