The Hong Kong Monetary Authority (HKMA) and The Hong Kong Association of Banks (HKAB) have announced the formation of a joint taskforce on SME Lending.

The initiative aims to address ongoing challenges faced by SMEs in securing bank financing amidst an uncertain economic environment.

Eddie Yue, Chief Executive of the HKMA, highlighted that while Hong Kong’s economy has been recovering, many SMEs still struggle with financial difficulties.

In response, the HKMA has implemented measures to support these businesses, including the nine initiatives launched in March 2024.

These initiatives, which include provisions against early repayment demands and adjustments to credit limits, have already benefitted around 14,000 SMEs with over HK$31 billion in total credit limits.

During a recent meeting with the three chairman banks of HKAB, it was reaffirmed that there will be no change in their risk appetite or credit approval standards for SME financing.

The newly established taskforce will further strengthen support for SMEs by addressing individual financing difficulties and identifying common issues that require industry-wide solutions.

Additionally, the taskforce will enhance communication between the banking sector and SMEs to better understand their financing needs.

The discussion also touched on improving transparency and efficiency in residential mortgage lending, with plans to enhance the customer experience through clearer communication and timely processing.

The taskforce will continue to work on these issues at the industry level.

Yue added,

“The HKMA and the banking sector will work together to continue providing support for SMEs seeking bank financing, and walk side-by-side with SMEs to get through this rather difficult time. Understandably, it is necessary for banks to maintain consistent and effective risk management to safeguard depositor interests.

For cases of prolonged non-repayment despite relief or restructuring provided, actions will inevitably be taken by banks, but they will ensure such actions are implemented and communicated to the customers in an accommodative manner.”

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