Hong Kong Monetary Authority and HKAB hold first task force meeting on SME lending

The Joint Task Force on SME Lending, established by the Hong Kong Monetary Authority (HKMA) and the Hong Kong Banking Association (HKAB), held its inaugural meeting on 5 September 2024. According to the Hong Kong Monetary Authority, this key session aimed to address the challenges faced by SMEs in accessing and maintaining bank funding.

Key issues discussed

Co-chaired by Mr Arthur Yuen, Deputy Chief Executive Officer of the HKMA, and Ms Luanne Lim, Chairperson of the HKAB, the meeting brought together representatives from the HKMA, HKAB and 14 banks involved in SME lending. The discussions covered several key topics, including:

• Small and medium-sized enterprise support measures: Banks reaffirmed their commitment to the nine previously introduced SME support measures and ensured continued financing and support for sustainable SME development.
• Risk tolerance: Banks have confirmed that their risk appetite and related credit approval criteria for financing small and medium-sized enterprises remain unchanged.
• Customer Fairness and Transparency: Since the task force was established, approximately 70 inquiries and cases have been received, highlighting issues such as unclear banking information and lengthy credit approval processes. Best practices such as improved transparency and streamlined application processes have been shared to improve customer experience.
• People and Resources: Banks have pledged to allocate sufficient resources to review credit requests promptly, aiming to respond within a month under normal circumstances.
• Home Equity Loan Approval: To increase transparency and efficiency in mortgage approvals, banks will notify applicants of their approval decision within 14 days of receiving all required documentation.

Commitment to risk management

The task force stressed the importance of consistent and effective risk management to protect depositor interests. In the event of prolonged non-payment despite relief measures, banks will take appropriate action while maintaining clear communication with affected customers.

Future Initiatives

The task force also discussed further facilitating bank support for SME development, upgrading and transformation. The HKMA and the banking industry plan to organise seminars and activities over the next two months to help SMEs better leverage data and technology to improve productivity. Details of these events will be announced in due course.

The task force, established in August, aims to strengthen support for SMEs at both the individual and industry level. This includes reviewing cases of SMEs experiencing difficulties in accessing funding and establishing a mechanism for the HKMA to refer cases to relevant banks. The task force will continue to enhance communication between the HKMA, the banking industry and the commercial sector to better understand and support SMEs’ ​​funding needs.

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