The Hong Kong Monetary Authority (HKMA) published today (Monday) the results of Survey on Small and Medium-Sized Enterprises (SMEs)’ Credit Conditions for the third quarter of 2020. Regarding SMEs’ perception of banks’ credit approval stance relative to 6 months ago, excluding respondents who answered “no idea / don’t know”, 59% perceived similar or easier credit approval stance in the third quarter of 2020, compared with 64% in the previous quarter. 41% perceived more difficult credit approval stance, compared with 36% in the previous quarter (Chart 1 in the Annex). The increase in the percentage was mainly contributed by SMEs who did not apply for or enquire about new credit during the quarter. Among those who applied for or enquired about new credit, the percentage of respondents perceiving more difficult credit approval stance remained relatively stable. Therefore, the perception of 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. Of those respondents with existing credit lines, 82% reported that banks’ stance on existing credit lines was easier or unchanged in the third quarter of 2020, down from 95% in the previous quarter, but comparable to the 86% registered in the fourth quarter of 2019 and 83% in the first quarter of 2020 (Chart 2 in the Annex). 18% of the respondents reported tightened banks’ stance on existing credit lines in the third quarter of 2020, up from 5% in the previous quarter, but comparable to the 14% registered in the fourth quarter of 2019 and 17% in the first quarter of 2020. In this survey, tightened 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. 5% of the respondents reported that they had applied for new bank credit during the third quarter of 2020. Among the respondents who had already known their application outcomes, 95% reported fully or partially successful applications, up from 90% in the previous quarter (Chart 3 in the Annex). 5% reported unsuccessful applications, down from 10% in the previous quarter. Owing to small sample sizes of SMEs with existing credit lines (27% of surveyed SMEs) and with new credit applications (5% of surveyed SMEs) during the quarter, the results could be prone to large fluctuations, and hence should be interpreted with care. About Survey on Small and Medium-Sized Enterprises (SMEs)’ Credit Conditions In light of the importance of SMEs to the Hong Kong economy and concerns about potential funding difficulties facing SMEs over the past few years, the HKMA has appointed the Hong Kong Productivity Council (HKPC) to carry out this survey, starting from the third quarter of 2016. This survey is conducted on a quarterly basis, covering about 2,500 SMEs from different economic sectors each time. The results of this survey can help monitor the development of SMEs’ access to bank credit from a demand-side perspective The results of this survey should be interpreted with caution. Similar to other opinion surveys, views collected in this survey may be affected by changes in sentiment due to idiosyncratic events that occurred over the survey period, which can make the results prone to fluctuations. Readers are advised to interpret the results together with other economic and financial information. In addition, views collected are limited to the expected direction of inter-quarter changes (e.g. “tighter”, “similar” or “easier”) without providing information about the magnitude of these changes.
The Hong Kong Monetary Authority (“HKMA”) announced the results of the residential mortgage survey for September 2020. The number of mortgage applications in September increased month-on-month by 13.3% to 12,288. Mortgage loans approved in September decreased by 1.6% compared with August to HK$37.1 billion. Among these, mortgage loans financing primary market transactions decreased by 13% to HK$5.6 billion and those financing secondary market transactions increased by 1.2% to HK$26.5 billion. Mortgage loans for refinancing decreased by 1.9% to HK$5 billion. Mortgage loans drawn down during September decreased by 8.4% compared with August to HK$27.8 billion. The ratio of new mortgage loans priced with reference to HIBOR increased from 92.9% in August to 93.5% in September. The ratio of new mortgage loans priced with reference to best lending rates decreased from 4.2% in August to 3.8% in September. The outstanding value of mortgage loans increased month-on-month by 0.8% to HK$1,556 billion at end-September. The mortgage delinquency ratio remained unchanged at 0.04% and the rescheduled loan ratio remained unchanged at nearly 0%.
The Hong Kong Monetary Authority (HKMA) and the Bank for International Settlements Innovation Hub (BISIH) Centre in Hong Kong today (3 August 2020) launched the TechChallenge — Digitising Trade Finance initiative to highlight the potential for new technologies to enhance trade finance mechanisms. In collaboration with the Asian Development Bank (ADB), the International Chamber of Commerce (ICC), the Institute of International Finance (IIF), the People’s Bank of China (PBOC), and the Wolfsberg Group, the HKMA and the BISIH Centre in Hong Kong have identified areas where private and public sector ideas could help address TradeTech challenges. Private firms are invited to submit innovative solutions focusing on connecting TradeTech platforms, tech-driven trade finance inclusion for SMEs, and TradeTech infrastructure for emerging markets. "The TechChallenge is taking place against the backdrop of the COVID-19 global pandemic, which is impacting global trade volumes and by implication the livelihoods of many SMEs. This initiative recognises that novel technologies and public-private partnerships can assist in improving outcomes, including through further digitising trade finance,” said Benoît Cœuré, Head of the BISIH. Edmond Lau, Senior Executive Director of the HKMA, said, “The HKMA is pleased to work with the BISIH to launch the TechChallenge. We have a shared goal of addressing the pain points in the trade finance business, and this initiative is one of the key steps towards achieving this goal. We envisage that the TechChallenge will encourage international collaboration, spur innovation and produce fruitful results that benefit the trade finance industry globally.” Interested firms can register to review the high-priority problem statements, compete and submit proposals on https://techchallenge.finnohub.org. The TechChallenge is administered by the Deloitte Asia Pacific Blockchain Lab and the deadline for submissions is 31 August 2020. Solutions will be judged by a panel comprising representatives of the public and private sectors, including experts from the partnering organisations listed above and leading global TradeTech platforms. Financial sponsorship will be available for shortlisted entrants to further develop their solutions. The top proposals will be announced and showcased at the Hong Kong Fintech Week in November 2020.
