May 29 – Japanese and Singaporean SMEs are set to receive a boost after a Memorandum of Understanding (MoU) was inked this week between SPRING Singapore, Japan Bank of International Cooperation (JBIC), and the Mizuho Corporate Bank (MHCB). The agreement will support business collaboration between the two countries through the facilitation of investment and sharing of regional knowledge.
The agreement will “promote Japanese companies’ investments in small and medium sized enterprises in Singapore and also accelerate their joint business opportunities in Singapore and other ASEAN countries,” according to Hiroshi Suehiro, Managing Executive of MHCB.
The arrangement is an important step towards enhanced cooperation between the countries and will help facilitate cross-border trade and investment in small and medium-sized enterprises (SMEs).
“Japanese SMEs often find it difficult to expand their businesses out of Japan due to challenges such as sourcing for local partners, acquiring local know-how and managing overseas operations,” said Toshiya Wakaume, General Manager of MHCB’s Singapore division.
“There is huge potential to be unlocked in the ASEAN region… and companies need to move quickly to capture market share,” said Choy Sauw Kook, SPRING Singapore’s Assistant Chief Executive.
As a unit of Singapore’s Ministry of Trade and Industry, SPRING Singapore works to advance Singaporean enterprises through management, financing, and innovation.
According to the MoU, the three organizations will work together to promote collaboration between Japanese and Singaporean SMEs in the ASEAN region, share funds and financial information, and will arrange consultations to achieve these goals. The arrangement will benefit both Japanese and Singaporean SMEs through the “creation of business opportunities” and will enhance “overseas business deployment” in the ASEAN region.
The Memorandum of Understanding also capitalizes on MHCB and JBIC’s recently established ASEAN private equity fund, which has US$150 million under management.
“Taking this opportunity of equity participation [by] Mizuho and JBIC in the fund and having close relationships with SPRING, we can come up with valuable strategic alliance opportunities between Singapore SMEs and Japanese companies. The alliance makes it possible to enhance the competitiveness of both sides and expand [our] joint business to neighboring ASEAN countries,” said Hiroshi Suehiro.
According to the memorandum, SMEs account for 99 percent of both Singaporean and Japanese firms, making the MoU an important agreement for ASEAN economic development and regional employment.