Time Finance's FY25/26 Earnings Growth and Lending Market Position: Assessing Sustainable Momentum in Singapore's Competitive SME Financing Sector

Singapore's SME lending market is undergoing a seismic shift, with non-bank lenders capturing 47% of the market share in 2025-a sharp rise from 31% in 2020. This transformation, driven by faster approval times and flexible lending criteria, has intensified competition for traditional players like Time Finance. However, the company's recent H1 2025/26 trading update reveals a 10% year-on-year increase in profit before tax to £4.3 million, alongside a 12% growth in its lending book to £235 million. This raises a critical question: does this earnings growth signal sustainable momentum in a market where non-bank lenders are rapidly reshaping the landscape?

Market Dynamics and Competitive Pressures

The SME lending market in Singapore is projected to expand to S$94 billion in 2025 and S$105 billion in 2026, with non-bank lenders expected to dominate 42% of the market by 2026. Platforms like Funding Societies (8.2% market share), Validus (4.1%), and Invoice Interchange (3.7%) have leveraged data-driven underwriting and embedded finance to capture SMEs seeking agility. Meanwhile, the Big 4 banks-DBS, UOB, OCBC, and Standard Chartered-have seen their collective market share decline from 79.1% in 2023 to 73% in 2024. This shift underscores the growing preference for non-traditional lenders, particularly among SMEs in high-growth sectors like technology and construction.

Time Finance, however, has carved a niche in secured lending through its Invoice Finance and Asset Finance divisions, which now account for 87% of its total lending book. This focus on collateralized assets reduces risk exposure, a critical advantage in a market where non-bank lenders charge higher interest rates (11.4%–18.7%) compared to banks' 7.2% average. The company's ability to maintain a 22% profit margin, even as it expands its lending book, suggests disciplined cost management and a strategic alignment with risk-averse SMEs.

Strategic Resilience and Operational Strength

Time Finance's H1 2025/26 results highlight its operational resilience. New business origination surged 48% to £62 million, driven by demand for its secured lending products. The reduction in net arrears (4.5% of the gross lending book) and net bad debt write-offs (1.0% of the average gross lending book) further indicate robust credit assessment frameworks. These metrics are particularly significant in a market where average loan sizes have shrunk by 42% since 2021, reflecting tighter credit conditions.

The company's emphasis on secured lending also positions it to weather potential interest rate declines. While average borrowing costs stabilized at 8.7% in 2024, projections suggest a drop to 6.5% by 2026. For non-bank lenders reliant on high-margin products, this could erode profitability.

This may also create barriers to entry that favor established firms like Time Finance.

The government's Enterprise Financing Scheme and SME Working Capital Loan program further complicate the landscape. These initiatives reduce lender risk and enable more favorable terms for borrowers, indirectly supporting traditional banks and creditworthy SMEs. Time Finance's ability to align with such schemes could amplify its competitive edge, particularly in sectors where collateralized lending remains the norm.

Conclusion: A Cautionary Optimism

Time Finance's 10% profit before tax growth in H1 2025/26 is a positive indicator, but its sustainability hinges on its ability to adapt to evolving market dynamics. The company's focus on secured lending, coupled with its disciplined risk management, positions it to thrive in a market increasingly defined by non-bank competition. However, the rapid adoption of embedded finance and regulatory shifts necessitate continuous innovation. If Time Finance can leverage its strengths in collateralized lending while embracing digital transformation, its earnings growth could indeed signal a durable trajectory in Singapore's competitive SME financing sector.