Hong Kong Monetary Authority Enhances Support for SMEs with New Initiatives



by Fintech News Hong Kong

April 24, 2024

In response to the evolving economic landscape and recent changes in consumer and tourist spending patterns, the Hong Kong Monetary Authority (HKMA) has introduced a series of new measures to further bolster its support for small and medium-sized enterprises (SMEs).

These initiatives aim to alleviate SMEs’ operational pressures due to varying business performances during the recent long Easter holiday.

The Banking Sector SME Lending Coordination Mechanism, established by the HKMA in collaboration with local banks, has introduced nine new support measures tailored for SMEs.

These measures include fee waivers, launching unsecured loan products, and incorporating more flexible cash flow management solutions to support SME resilience and growth.

The HKMA’s Commercial Data Interchange (CDI) will also significantly enhance credit accessibility for SMEs, especially those without property as collateral. By utilising a wide range of commercial data combined with advanced data analytics, banks are now better equipped to design credit products that address the specific needs of SMEs.

The newly launched one-stop SME information platform on the HKMA’s website is pivotal to this enhanced support. This platform provides detailed information about lending services available to SMEs, including dedicated service hotlines and various loan products like trade financing and unsecured overdrafts.

It empowers SMEs to make informed decisions, boosting their bargaining power with banks. The HKMA remains committed to closely monitoring the implementation of these support measures in collaboration with the Hong Kong Association of Banks and the Chinese Banking Association of Hong Kong.

Plans include easing the transition for credit limit adjustments and facilitating SMEs to switch lending banks more efficiently. These initiatives reflect the HKMA’s dedication to sustaining the vital role of SMEs in Hong Kong’s economy, which account for 98 percent of all businesses and are a significant source of employment.

The Financial Secretary has also extended the application period for the 80 percent and 90 percent Guarantee Products under the SME Financing Guarantee Scheme until the end of March 2026, reflecting ongoing support for SMEs. In addition, the HKMC Insurance Limited is set to review and potentially expedite the loan approval process based on commercial sector feedback.

Eddie YueHong Kong SMEs

Eddie Yue

“Looking back over the past few years, Hong Kong’s SME operators and staff have demonstrated remarkable resilience amid the series of blows from the social unrest and the pandemic. The Hong Kong banking sector has been attentive to SMEs’ operations throughout this period, taking an accommodating approach to handling customers’ needs so as to ride out the storm together,”

said Eddie Yue Chief Executive of HKMA.

“In fact, during the pandemic, the banking sector granted over 118,000 applications for PPPHS and other forms of relief, involving an aggregate amount of HK$1.2 trillion. This has alleviated the cash-flow pressure of 19,000 SMEs,”

he added.

Through continuous collaboration and dialogue with the banking sector and commercial stakeholders, the HKMA aims to ensure that SMEs in Hong Kong are well-positioned to navigate current challenges and seize future opportunities.

Featured image credit: Edited from Freepik

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