In existing work of sliding mode observers (SMOs) for descriptor systems, a necessary condition is that the system must be infinitely observable. This paper presents a scheme that circumvents that condition, by reformulating the system as a reduced-order system where certain structures in the system matrix are manipulated and certain states are treated as unknown inputs. Following that, an SMO is implemented on the reduced-order system where state and fault estimation can be achieved. Necessary and sufficient conditions of this scheme are also presented. Finally, a simulation example shows the effectiveness of the proposed scheme.