Financial skills vital for SMEs

PEOPLE must have some form of financial literacy certification before getting business loans, says National Development Bank managing director Moses Liu.
Liu said the lack of financial literacy skills was still the biggest hindrance to starting a business.
He said NDB would be introducing four new concessional loans this year and would like best results.
“The customers must go through a small financial skills training for them to be eligible for some of the loans,” he said.
The training will be done by the SME Corporation.
“We want to do lending in innovative ways.
“A lot of people want to become millionaires overnight.
“But you start small and build up capacity.
“Most people do not know what their personal share of the business is, salaries and wages and what the business should have to sustain itself.
“If they do not know how to manage the cash flow, they will struggle.
Liu said one of the key concepts to be promoted during the training is the cash flow management of a business.
“Business is a legal entity of its own,” he said.
“You want your business to grow, you must have ample reserves in terms of cash reserves to maintain the operation.
“So those are the skills that are going to be trained.
“If they have financial literacy skills, financial management skills, they will not have problems in repaying their loans.
“We want to change that by introducing those certification of financial literacy before they can come and borrow.
“ We will have some concessions when we have good cash flow as well.”