The joint Taskforce on SME Lending, established by the Hong Kong Monetary Authority (HKMA) and the Hong Kong Association of Banks (HKAB), recently held its inaugural meeting attended by representatives from the HKMA, HKAB, and 14 banks actively involved in lending to small and medium-sized enterprises (SMEs).
During the meeting, Co-chaired by Arthur Yuen, Deputy Chief Executive of the HKMA, and Luanne Lim, Chairperson of HKAB, participants addressed key issues surrounding SME and property mortgage lending, with a focus on cases where SMEs or members of the public encountered difficulties in securing or maintaining financing.
The discussion also covered feedback from the commercial sector and strategies for improving communication between banks and businesses. Several key highlights emerged:
First, the banks reaffirmed their commitment to supporting SMEs by maintaining the implementation of nine previously launched SME support measures.
These banks indicated that they would continue to provide the necessary financing and support for SME development.
Despite challenging market conditions, the participating banks emphasized that their risk appetite for SME financing and their credit approval standards remain unchanged.
The Taskforce also discussed concerns raised by SME borrowers, including instances where banks’ credit approval processes were perceived to be slow or unclear.
Around 70 cases of SME lending inquiries had been received and referred by the HKMA to banks, including requests for banks to review their credit approval decisions.
As a result, the participating banks shared best practices, such as enhancing transparency in the credit approval process and streamlining application procedures to improve efficiency and customer experience.
To address these concerns, the banks pledged to allocate sufficient manpower and resources to review requests made through the Credit Approval Review Arrangements.
The goal is to provide customers with feedback within one month under normal circumstances, while maintaining open and fair communication throughout the process.
In a related effort, the banks committed to improving the approval process for residential mortgage loans.
Applicants will be informed of the outcome within 14 days after submitting all required documents, aiming to improve transparency and provide applicants with sufficient time for financial planning.
The Taskforce emphasized the importance of maintaining robust risk management to protect depositor interests.
In cases of prolonged non-repayment, banks will take appropriate actions, while ensuring these measures are communicated to customers in a fair and accommodating manner.
The Taskforce also explored ways to further promote SME development, including initiatives to assist SMEs in upgrading their operations through the better use of data and technology.
The HKMA and banking industry plan to organize seminars and activities over the next two months to support SMEs in enhancing their productivity, with details to be announced soon.
