Introduction

The banking and finance services have boosted the Singapore’s economic growth in these 30 years. Singapore also becomes the prosperous financial center in Asia Pacific region. There are over 700 financial institution operate in Singapore. Banking services are all about business activities of accepting and ensuring the currency belong to other people and entities. When people want to earn a profit, they can lend out this money. Finance services are the products and services include banks credit unions, credit card companies, insurance firms, accountancy firms, consumer finance companies, stock brokerages, investment funds, real estate funds, and some government sponsored enterprises provided by 700 financial institutions in Singapore.

Due to Singapore budget proposed financial support, banking and finance services sector have encouraged firms to innovate and enterprise abroad. Moreover, internationalizing companies are introduced concessionary tax rates, and young and fast-growing companies are piloted a new risk-sharing scheme with alternative financing options by Budget 2015.

Contribution

1. Wealth management insurance & reinsurance

Wealth management is a professional service that provide appropriate financial products and services to build wealth to the clients. Singapore is recognized as a premier asset management location in Asia with sum assets under administrative of around S$1.4 trillion.

This is because Singapore is located at the crossroads between the East and West. It is a strategic geographical location, which offers worldwide speculators incomparable entry to the Asia Pacific markets. (MAS) Other than that, there are many international insurance firms and reinsurances are situated in Singapore, there are not only the local people playing in this industry. Hence this sector contribution to Singapore’s economic by attracting many foreign company and foreigner invest in Singapore.

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2. Foreign direct investment (FDI)

A country possesses an open trade regime, stable political and legal environment, and prudent macroeconomic policies, competitive tax rates a transparent regulatory environment and efficient judicial framework are easily attracting Multinational Corporation (MNC) to set up their business in this area which is FDI.

Singapore provide the above strength, therefore there are many MNCs do business in various sectors, for instance Financial and insurance services sector, Hotel and restaurant. FDI provide employment and higher salaries for Singaporeans and bring in new technology and expertise to sustain Singapore’s competitiveness.

3. Financing SME

Small and medium enterprises (SME) are important to the Singapore’s economic. There is 70 per cent of the work force work in SMEs, and also SMEs contribute around 50 per cent of the national GDP. Singapore’s government should strongly promote SME financing. In order to aid stimulate growth and facilitate economic restructuring.

Besides that, there are two options to SMEs financing, there are mix of internal financing and external are financing. Internal financing includes the business owner’s capital and retained earnings while external financing is primarily bank financing.