Hong Kong Monetary Authority Reports Stable Credit Conditions for SMEs in Q2 2024

The Hong Kong Monetary Authority (HKMA) has released the findings of its latest survey on the credit conditions for Small and Medium-Sized Enterprises (SMEs) for the second quarter of 2024. The survey results, published on August 1, 2024, indicate that SMEs' credit conditions have remained stable over the reviewed period.

Perceptions of Credit Approval Stance

According to the survey, 73% of SMEs perceived banks' credit approval stance as either “similar” or “easier” compared to six months ago, a slight improvement from 71% in the previous quarter. Conversely, 27% of respondents felt the credit approval stance was “more difficult,” a decrease from 29% in the first quarter of 2024. The HKMA noted that these perceptions might not necessarily reflect actual difficulties faced by SMEs in obtaining bank credit, as they could be influenced by various factors, including media reports and business conditions.

Existing Credit Lines and New Credit Applications

The survey also revealed changes in banks' stance on existing credit lines. Only 2% of respondents with existing credit lines reported a “tighter” stance from banks, a significant drop from 12% in the previous quarter. The term “tighter” in this context includes measures such as reducing credit lines, raising interest rates, imposing additional collateral requirements, or shortening loan tenors.

Regarding new credit applications, 2% of SMEs reported applying for new bank credit during the second quarter of 2024. Among those who had received responses to their applications, 70% reported fully or partially successful outcomes, down from 86% in the previous quarter. However, the HKMA cautions that these results should be interpreted carefully due to the small sample size of SMEs applying for new credit and those with existing credit lines.

About the Survey

The HKMA has been conducting this survey quarterly since the third quarter of 2016, in collaboration with the Hong Kong Productivity Council (HKPC). The survey covers approximately 2,500 SMEs from various economic sectors each quarter. It aims to monitor developments in SMEs' access to bank credit from a demand-side perspective. The HKMA advises that the results should be interpreted alongside other economic and financial information due to potential fluctuations caused by idiosyncratic events and changes in sentiment during the survey period.

For detailed tables and technical information, refer to the HKPC’s website at https://www.hkpc.org/en/about-us/hkpc-publication/industry-insight/hkma-survey.

Source: Hong Kong Monetary Authority