HKMA announced the results of a survey on the credit conditions of small and medium-size enterprises (SMEs) for the second quarter of 2020. The survey solicits views from nearly 2,500 SMEs in ten major sectors about their perception on banks' credit approval stance relative to six months ago, views on banks' stance on existing credit lines, and analysis of results of new bank credit applications. The results of this survey are expected to help monitor the development of SMEs’ access to bank credit from a demand-side perspective.
Regarding the perception of SMEs on banks’ credit approval stance relative to six months ago, 64% perceived similar or easier credit approval stance in the second quarter of 2020, compared with 69% in the previous quarter. Nearly 36% perceived more difficult credit approval stance, compared with 31% in the previous quarter. 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 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 or news reports, business conditions, and opinions of relatives and friends.
Of the respondents with existing credit lines, 95% reported that banks’ stance on existing credit lines was easier or unchanged in the second quarter of 2020, up from 83% in the previous quarter. Nearly 5% of the respondents reported tightened banks’ stance on existing credit lines in the second quarter of 2020, down from 17% in the previous quarter. 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. Nearly 7% of the respondents reported that they had applied for new bank credit during the second quarter of 2020. Among the respondents who had already known their application outcomes, 90% reported fully or partially successful applications, up from 84% in the previous quarter. About 10% reported unsuccessful applications, down from 16% in the previous quarter.
Keywords: Asia Pacific, Hong Kong, Banking, SME, Credit Conditions Survey, Credit Risk, HKMA
Previous ArticleFSB Report Reviews Macro-Prudential Framework and Tools in Germany
The European Central Bank (ECB) is undertaking the integrated reporting framework (IReF) project to integrate statistical requirements for banks into a standardized reporting framework that would be applicable across the euro area and adopted by authorities in other EU member states.
The Basel Committee on Banking Supervision met, shortly after a gathering of the Group of Central Bank Governors and Heads of Supervision (GHOS), the oversight body of BCBS.
The International Organization of Securities Commissions (IOSCO) welcomed the work of the international audit and assurance standard setters—the International Auditing and Assurance Standards Board (IAASB)
The European Banking Authority (EBA) has been awarded the top European Standard for its environmental performance under the European Eco-Management and Audit Scheme (EMAS).
The Bank of England (BoE) published a Statistical Notice (2022/18), which informs that due to the Bank Holiday granted for Her Majesty Queen Elizabeth II’s State Funeral on Monday September 19, 2022.
The French Prudential Control and Resolution Authority (ACPR) announced that the European Banking Authority (EBA) has updated its filing rules and the implementation dates for certain modules of the EBA reporting framework 3.2.
The Australian Prudential Regulation Authority (APRA) announced reduction in the aggregate Committed Liquidity Facility (CLF) for authorized deposit-taking entities to ~USD 33 billion on September 01, 2022.
The China Banking and Insurance Regulatory Commission (CBIRC) published the administrative measures for internal control of wealth management companies, which come into force on the day of promulgation.
The Prudential Regulation Authority (PRA) proposed its approach to policy-making as it takes on wider rulemaking responsibilities under the Financial Services and Markets Bill.
The European Central Bank (ECB) published its opinion on the proposal for a regulation on harmonized rules on fair access to and use of data (Data Act).