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PSG Grant for AI Solutions in Singapore: A Guide for SMEs

Artificial intelligence is becoming increasingly accessible to small and medium-sized enterprises (SMEs) in Singapore. From AI-powered customer service and marketing tools to automation, analytics, document processing, and sales solutions, businesses can now adopt technologies that were once available mainly to larger organisations.

One important source of support is the Productivity Solutions Grant (PSG). The grant helps eligible Singapore businesses adopt pre-approved IT solutions and equipment that improve productivity and automate business processes. As Singapore expands support for digital and AI-enabled solutions, SMEs may find more opportunities to adopt AI tools with government support.

This guide explains how the PSG works, who may be eligible, how AI solutions fit into the programme, and what SMEs should consider before applying.
  • AI Solutions Singapore, PSG Grant, Singapore SMEs

What Is the Productivity Solutions Grant (PSG)?

The Productivity Solutions Grant (PSG) is a Singapore government support programme that helps businesses improve productivity through the adoption of eligible IT solutions and equipment.

 

According to Enterprise Singapore, eligible local SMEs can receive up to 50% support for eligible costs, subject to the programme’s terms and conditions. Companies supported by EnterpriseSG are also subject to an annual PSG grant cap of S$30,000, running from 1 April to 31 March.

 

The PSG supports both sector-specific and generic digital solutions that have been pre-approved by EnterpriseSG and participating agencies.

 

For SMEs considering AI adoption, this means that certain AI-enabled or Generative AI solutions may be available through PSG-supported pre-approved solution categories. The available solutions can change over time, so businesses should always check the latest listings before making a purchase decision.

Can SMEs Use PSG for AI Solutions?

Yes, eligible SMEs may be able to receive PSG support for selected AI-enabled and Generative AI solutions that are available as pre-approved solutions.

 

Singapore has continued to expand its AI adoption initiatives. IMDA and EnterpriseSG have been working to make market-tested AI and GenAI solutions more accessible to businesses, including through grant-supported pre-approved solutions.

Depending on the solutions available at the time of application, AI technologies may support areas such as:

 

  • Customer engagement
  • Sales and marketing
  • Business process automation
  • Document processing
  • Data analysis
  • Customer support
  • Content generation
  • Lead management
  • Workflow optimisation
  • Business decision-making

However, it is important to understand that not every AI tool automatically qualifies for PSG support. The specific solution, vendor, package, and eligible cost components must meet the relevant PSG and pre-approval requirements.

Who Is Eligible for the PSG Grant?

To qualify for the PSG, a business generally needs to meet Enterprise Singapore’s eligibility requirements.

These include:

 

  • The business must be registered and operating in Singapore.
  • The company must have at least 30% local equity held directly or indirectly by Singapore citizens and/or Singapore Permanent Residents, based on ultimate individual ownership.
  • The group’s annual sales turnover must not exceed S$100 million, or the group’s employment size must not exceed 200 employees.
  • The IT solution or equipment must be used in Singapore.
  • The applicant must not make payment or place a deposit with the vendor before submitting the grant application.

The company must also continue to meet the relevant eligibility requirements through the grant process.

 

Sole proprietorships and partnerships may also apply if they meet the applicable PSG eligibility requirements.

How Much PSG Support Can SMEs Receive?

Currently, the PSG provides up to 50% support for eligible costs for local SMEs, subject to the applicable grant conditions and cost caps.

 

Companies supported by EnterpriseSG are subject to an annual grant cap of S$30,000 for solutions supported by EnterpriseSG during the relevant grant period, which runs from 1 April to 31 March.

 

The exact amount of support depends on factors such as:

 

  • The selected solution
  • The approved package
  • Eligible cost components
  • Applicable cost caps
  • Grant conditions
  • The company’s remaining grant support availability

Businesses should not assume that the entire cost of an AI platform or implementation will qualify for funding.

Types of AI Solutions That May Benefit SMEs

AI can support businesses across a wide range of functions. Depending on the available pre-approved solutions and the needs of the business, SMEs may explore tools designed to improve productivity in several areas.

 

AI-Powered Customer Service

 

AI chatbots and customer service platforms can help businesses respond to common enquiries, provide information, and route more complex issues to human employees.

Potential use cases include:

 

  • Answering frequently asked questions
  • Handling basic customer enquiries
  • Providing product information
  • Supporting lead generation
  • Automating initial customer interactions

This can help teams manage repetitive enquiries more efficiently.

AI for Sales and Marketing

 

AI-powered tools can support sales and marketing activities by helping businesses automate repetitive tasks and improve campaign workflows.

Depending on the solution, AI features may assist with:

 

  • Content generation
  • Customer segmentation
  • Lead follow-ups
  • Sales forecasting
  • Marketing workflow automation
  • Customer engagement

Some solution categories also recognise AI features such as automating routine sales tasks, customer responses, data capture, follow-ups, and conversion analysis.

AI for Document and Data Processing

 

Many businesses spend significant time handling documents, forms, and business data.

AI-enabled solutions may help automate tasks such as:

 

  • Extracting information from documents
  • Recognising text or images
  • Organising business information
  • Reducing manual data entry
  • Generating recommendations or outputs based on trained models

These types of AI capabilities are reflected in IMDA’s pre-approval guidance for certain digital solution categories.

AI for Business Automation

 

AI can also support workflow automation across different departments.

For example, businesses may use AI-enabled tools to streamline:

 

  • Internal processes
  • Data entry
  • Customer communication
  • Reporting
  • Lead management
  • Routine administrative tasks

The goal should not simply be to adopt AI because it is a growing trend. SMEs should focus on tools that solve specific productivity challenges.

Benefits of Using PSG for AI Adoption

Lower the Cost of Digital Transformation

 

AI adoption can require investment in software subscriptions, implementation, training, and business process changes.

 

PSG support can reduce the upfront cost of adopting eligible solutions, making it easier for SMEs to test and implement suitable technologies.

 

Improve Business Productivity

 

The main purpose of the PSG is to help companies improve productivity and automate existing processes.

 

AI tools can potentially reduce repetitive manual work, allowing employees to focus more on activities that require human expertise and decision-making.

 

Access Pre-Approved Solutions

 

Pre-approved solutions are intended to help SMEs access solutions that have undergone the relevant evaluation and approval process.

 

IMDA states that pre-approved solutions are designed to be ready, affordable, and suitable for wider SME adoption, including solutions using technologies such as cloud and AI.

 

Support Business Growth

 

The right AI solution can help an SME improve customer service, process information faster, automate routine workflows, and support more efficient operations.

 

However, the business value will depend on selecting the right technology for the company’s actual needs.

How to Apply for the PSG Grant for AI Solutions

The PSG application process generally follows several key steps.

 

Step 1: Identify Your Business Needs

 

Before searching for a solution, identify the problem you want to solve.

For example:

 

  • Are employees spending too much time on manual data entry?
  • Is your customer service team receiving repetitive enquiries?
  • Do you need to automate sales follow-ups?
  • Are marketing processes taking too long?
  • Do you need a better way to process documents?

A clear problem statement can make it easier to choose a suitable solution.

 

Step 2: Search for a Suitable Pre-Approved Solution

 

Businesses can use the relevant Singapore government platforms, including GoBusiness Gov Assist, to review available PSG-supported solutions and vendors.

 

IMDA also offers the GenAI Navigator, which provides recommendations based on an SME’s business needs and guides businesses toward appropriate market-tested pre-approved GenAI solutions with up to 50% grant support, where applicable.

 

Enterprise Singapore PSG information

SMEs Go Digital and GenAI support

 

Step 3: Obtain the Required Quotation

 

For IT solutions, businesses generally need to obtain a quotation from the selected pre-approved vendor.

 

The quotation and selected package should match the approved solution and applicable requirements.

Businesses should carefully check:

 

  • The exact solution package
  • Eligible components
  • Pricing
  • Subscription terms
  • Implementation requirements
  • Whether additional charges are supportable

Step 4: Apply Before Making Payment

 

This is one of the most important requirements.

Do not make payment or place a deposit for the solution before submitting the PSG application.

 

Enterprise Singapore states that retrospective applications are not supported when the applicant has already made payment or a deposit before application submission.

 

Businesses should therefore complete the relevant application process before committing financially to the solution.

 

Step 5: Submit the Application Through the Business Grants Portal

 

Eligible companies apply for the PSG through the Business Grants Portal (BGP) using their Corppass account.

 

The applicant company must apply for and manage the grant directly. EnterpriseSG does not permit third parties to submit or manage the grant application on behalf of the applicant company.

 

Step 6: Review the Letter of Offer

 

If the application is successful, the company will receive a Letter of Offer outlining important information, including:

 

  • The approved grant support
  • Grant conditions
  • The qualifying project period
  • The approved solution or equipment

Businesses should review and accept the offer within the required timeline.

 

Step 7: Implement the Solution and Submit Your Claim

 

After meeting the relevant grant conditions and completing the project, the company can proceed with the claims process according to the approved terms.

 

EnterpriseSG states that complete PSG applications generally take around six weeks to process, although processing times may vary depending on the application and any clarifications required.

Common Mistakes SMEs Should Avoid

Paying the Vendor Too Early

 

One of the biggest mistakes is making a payment or deposit before submitting the grant application.

This can make the purchase ineligible for PSG support.

 

Choosing a Solution Only Because It Has AI

 

AI is not automatically useful simply because it is advanced technology.

Businesses should consider:

 

  • What business problem does the solution solve?
  • How much time can it potentially save?
  • Can employees use it effectively?
  • Does it integrate with existing systems?
  • Is the cost justified after grant support?

Assuming Every Vendor or AI Tool Is Eligible

 

Not all vendors and solutions qualify for PSG support.

Always verify the current pre-approved solution listing and the specific package before applying.

 

Ignoring Implementation and Change Management

 

Technology alone does not guarantee productivity gains.

Employees may need training, processes may need to be redesigned, and businesses may need to monitor how effectively the new system is being used.

How to Choose the Right AI Solution for Your SME

Before selecting an AI tool, consider these questions:

 

What Problem Are You Trying to Solve?

 

Start with the business challenge rather than the technology.

For example:

 

  • Reduce customer response times
  • Automate repetitive administrative work
  • Improve lead management
  • Process documents faster
  • Improve marketing efficiency

Is the Solution Suitable for Your Business Size?

 

A complex enterprise platform may not be the best option for a small business.

Look for a solution that matches your:

 

  • Budget
  • Team size
  • Technical capabilities
  • Existing workflows
  • Growth plans

Can It Integrate With Existing Systems?

 

Consider whether the solution works with your existing:

 

  • CRM
  • Accounting software
  • E-commerce platform
  • Customer support tools
  • Internal business systems

How Will You Measure Success?

 

Define clear outcomes before implementation.

Possible measurements include:

 

  • Time saved
  • Reduction in manual tasks
  • Faster customer response times
  • More leads generated
  • Improved conversion rates
  • Reduced operating costs

This can help businesses determine whether the AI investment is delivering meaningful results.

PSG and the Future of AI Adoption in Singapore

Singapore continues to invest in AI adoption and digital transformation. EnterpriseSG and IMDA have highlighted efforts to expand access to AI-enabled and GenAI solutions for businesses, including through pre-approved solutions supported under the PSG.

 

For SMEs, this creates an opportunity to explore practical AI applications without necessarily building complex technology from scratch.

 

The most successful approach is likely to be one that focuses on real business needs. Instead of adopting multiple AI tools at once, SMEs can start by identifying high-impact areas where automation or AI assistance can improve productivity.

Final Thoughts

The Productivity Solutions Grant (PSG) can help eligible Singapore SMEs reduce the cost of adopting selected digital, AI-enabled, and Generative AI solutions.

 

With support of up to 50% of eligible costs, subject to current programme rules and conditions, the PSG can make it easier for businesses to invest in technology that improves productivity and automates business processes.

 

Before applying, SMEs should verify their eligibility, identify a suitable current pre-approved solution, obtain the appropriate quotation, and ensure that they submit the application before making any payment or deposit.

 

As AI becomes a more important part of everyday business operations, Singapore SMEs that take a practical and well-planned approach to adoption may be better positioned to improve efficiency, strengthen customer experiences, and support future growth.

 

Note: PSG policies, support levels, approved solution lists, and application requirements may change. Always check the latest information through Enterprise Singapore’s official PSG page and the relevant government platforms before making a purchase or submitting an application.

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