1st August 2024 – (Hong Kong) The Hong Kong Monetary Authority (HKMA) published the results of its Survey on Small and Medium-Sized Enterprises (SMEs)’ Credit Conditions for the second quarter of 2024. According to the survey, SMEs’ credit conditions remained stable during the period.
Regarding SMEs’ perception of banks’ credit approval stance relative to six months ago, excluding respondents who answered “no idea/don’t know”, 73% perceived a “similar” or “easier” credit approval stance in the second quarter of 2024, up from 71% in the previous quarter. Meanwhile, 27% perceived a “more difficult” credit approval stance, down from 29% in the previous quarter.
The HKMA noted that the perception of a more difficult credit approval stance may not necessarily reflect actual difficulties faced by SMEs in obtaining bank credit, as the perception could be affected by a number of factors, such as media/news reports, business conditions and opinions of relatives and friends.
Among respondents with existing credit lines, only 2% reported a “tighter” banks’ stance, significantly down from 12% in the previous quarter. The HKMA explained that a tighter stance on existing credit lines denotes a range of possible measures or arrangements, such as reducing unused and used credit lines, raising the interest rate, imposing additional collateral requirements, or shortening loan tenor. Therefore, respondents’ indication of banks’ stance on existing credit lines may not directly reflect banks’ supply of credit to SMEs.
The survey also gauged the results of new credit applications from SMEs. 2% of the respondents reported that they had applied for new bank credit during the second quarter of 2024. Among the respondents who had already known their application outcomes, 70% reported fully or partially successful applications, down from 86% in the previous quarter.
The HKMA cautioned that due to small sample sizes of SMEs with existing credit lines (13% of surveyed SMEs) and with new credit applications (2% of surveyed SMEs) during the quarter, the results could be prone to large fluctuations and should be interpreted with car
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