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93% Of Hong Kong SMEs Report Easing of Credit Lines During Q1 2021; HKMA Survey Finds

The Hong Kong Monetary Authority (HKMA) has recently published the results of its survey into the credit conditions of Small and Medium-Sized Enterprises (SMEs) during the first quarter of 2021.

The results reported that regarding SMEs’ perception of banks’ credit approval stance, relative to 6 months ago, and excluding respondents who answered “no idea/don’t know”, 70% perceived similar or easier credit approval stance in the first quarter of 2021, up from 65% in the previous quarter. Likewise, 30% perceived a more difficult credit approval stance, down from 35% in the previous quarter.

The perception of a 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 respondents with existing credit lines, 93% reported that banks’ stance on existing credit lines was easier or unchanged in the first quarter of 2021, compared with 95% in the previous quarter. This is whilst 7% of the respondents reported tighter banks’ stance on existing credit lines in the first quarter of 2021, compared with 5% in the previous quarter. In this survey, a tighter 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. 4% of the respondents reported that they had applied for new bank credit during the first quarter of 2021. Among the respondents who had already known their application outcomes, 92% reported fully or partially successful applications, compared with 93% in the previous quarter. 8% reported unsuccessful applications, compared with 7% in the previous quarter.

Owing to the small sample sizes of SMEs with existing credit lines (14% of surveyed SMEs) and with new credit applications (4% of surveyed SMEs) during the quarter, the results could be prone to large fluctuations, and hence should be interpreted with care.


  • Tyler is a fintech journalist with specific interests in online banking and emerging AI technologies. He began his career writing with a plethora of national and international publications.

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