Key Information

inSight
Speeches
Speeches by Speaker
Norman T.L. Chan
Peter Pang
Eddie Yue
Arthur Yuen
Zeti Akhtar Aziz
Raymond Li
Edmond Lau
Esmond Lee
Meena Datwani
Vincent W.S. Lee
James Lau
Joseph Yam
Y K Choi
William Ryback
David Carse
Tony Latter
Andrew Sheng
Hans Genberg
Simon Topping
Michael Taylor
The Honourable Donald Tsang
Chen Yuan
Dai Xianglong
Don Brash
Jaime Caruana
Andrew Crockett
Mario Draghi
David Eldon
Stanley Fischer
Timothy F. Geithner
Stephen Grenville
Kenneth G. Lay
William McDonough
Ernest Patrikis
Glenn Stevens
Jean-Claude Trichet
Tarisa Watanagase
Zeti Akhtar Aziz
Carmen Chu
Alan Au
Press Releases
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
2000
1999
1998
1997
Press Releases by Category
Bogus Voice Message Phone Calls
Banking in Hong Kong
Fraudulent Websites, E-mails and Telephone System, and other fraud cases
Granting of Banking Licences
Exchange Fund
Table of Multiples of Notes and Payments for Allotted Amount under non-competitive tender
Table of Multiples of Notes and Payments of Application Amount under non-competitive tender
Tender of Exchange Fund Bills and Notes
Tender Results of Exchange Fund Bills and Notes
Tentative Issuance Schedule for Exchange Fund Bills and Notes
Appointments and Departures
HKMA Pay Review
HKMA Publications
Speeches
The Hong Kong Mortgage Corporation
Hong Kong Note Printing Limited
Hong Kong Institute for Monetary Research
Exchange Fund Investment Limited
Others
Hong Kong Financial Infrastructure
International Relations
Investment Products Related to Lehman Brothers
Monetary Policy
Notes and Coins
Renminbi business
Credit Card Lending Survey
Monetary Statistics
Residential Mortgage Survey
Year 2000
Others
Guidelines and Circulars
Guidelines
Circulars
2015
2014
2013
2012
2011
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
2000
1999
1998
1997
515.5995

Press Releases

Surveys on the financing situation of small and medium-sized enterprises

The Hong Kong Monetary Authority (HKMA) today (23 June) released the findings of two surveys on the financing situation of small and medium-sized enterprises (SMEs). The first survey, conducted in late 1999 covers 30 SMEs. The second survey, conducted in March 2000 covers eight banks and four SME associations in Hong Kong. The survey results shed light on the financing situation of SMEs in the aftermath of the Asian financial crisis.

In line with general perceptions, the survey results suggest that there is a gap between the demand for bank credit by SMEs and the supply of funds by banks. In general, the availability of bank financing is considered inadequate by SMEs. This is evidenced by their heavy reliance on personal savings as the major funding source for starting up and expanding business.

The SMEs surveyed perceived that banks generally adopt conservative lending policies and rely mainly on the availability of collateral. The fall in property prices during the Asian financial crisis made it difficult for SMEs to obtain bank finance.

In line with the views expressed by SMEs regarding banks' credit policies, the banks interviewed acknowledged that they had adopted a more conservative lending stance toward SMEs than toward large companies because of a number of unfavourable characteristics of the SME loan market. These include: relatively high delinquency rates; inadequate disclosure of financial and other information; low transparency of operations and poor accounting standards; lack of discipline in the use of credit facilities; and the low level of cost-effectiveness of such lending.

Banks also admitted the importance of collateral in SME lending. However, they rejected claims that it is the sole determinant. Their generally heavy reliance on collateral is partly a practice developed in the past years when the property market was booming, and partly a response to the characteristics of the SME loan market.

Banks and SME associations appeared to be somewhat more optimistic during the March survey about the short-term prospects for an increase in bank credit than were the SMEs represented in the survey carried out in late 1999. The difference may mark some turnaround in the financing situation of SMEs as time passed, although the different composition of the samples may also have had an effect. It is encouraging to note that banks interviewed in the March survey indicated a neutral to positive attitude in their future lending stance.

Some banks revealed that they were very aware of the difficulties faced by SMEs and had already taken active steps to improve services to SMEs. They had either started increasing their lending to SMEs since last year or set up dedicated business units focusing on the SME loan market.

While there was no consensus among the survey respondents on the means to relieve the financing situation of SMEs, a number of suggestions were made by respondents to help remove the hindrances for bank lending to SMEs and enhance the role of market forces. These include: setting up a Credit Reference Agency for SMEs; disseminating information about the SME loan market; promoting adequate disclosure of financial and other information of SMEs; enhancing SMEs' accounting standards; and developing and using a credit-scoring system in the SME loan market.

A report on the findings of the two surveys on the financing situation of SMEs conducted by the HKMA is available from the HKMA, 30/F, 3 Garden Road, Hong Kong. The full text of the report is also available on the HKMA website.

For further enquiries, please contact:

Thomas Chan, Senior Manager (Press) at 2878 1480 or
Caitlin Wong, Manager (Press) at 2878 1687

Hong Kong Monetary Authority
23 June 2000

Attachment:
Report
Annexes I and II
Annex III

Last revision date: 2 August 2011
ABOUT THE HKMA
The HKMA
Tender Invitations
Careers@HKMA
Legislative Council Issues
Links
The HKMA Information Centre
KEY FUNCTIONS
Monetary Stability
Banking Stability
International Financial Centre
Exchange Fund
PUBLICATIONS & RESEARCH
Annual Report
Half-Yearly Monetary & Financial Stability Report
Quarterly Bulletin
HKMA Background Briefs
Reference Materials
Research
MARKET DATA & STATISTICS
CMU Bond Price Bulletin
Economic & Financial Data for Hong Kong
Monthly Statistical Bulletin
Monetary Statistics
KEY INFORMATION
Press Releases
Speeches
Guidelines & Circulars
Forthcoming Events
inSight
OTHER INFORMATION
Information in Other Languages (Bahasa Indonesia, हिन्दी, नेपाली, ਪੰਜਾਬੀ, Tagalog, ไทย, اردو)
Account Opening
Consumer Corner
Consumer Education Programme
Complaints about Banks
Complaints about SVF Licensees
Internet Banking
Fraudulent Bank Websites, Phishing E-mails and Similar Scams
Be Careful of Bogus Phone Calls and SMS Messages
Authenticate the Callers and Bank Hotline Numbers
Register of AIs & LROs
Register of Securities Staff of AIs
Register of SVF Licensees
Investment Products Related to Lehman Brothers
Photo Gallery