Survey on Small and Medium-Sized Enterprises (SMEs)’ Credit Conditions for First Quarter 2019

The Hong Kong Monetary Authority (HKMA) published today (Monday) the results of Survey on Small and Medium-Sized Enterprises (SMEs)’ Credit Conditions for the first quarter of 2019.

Regarding SMEs’ perception of banks’ credit approval stance relative to 6 months ago, 81% of respondents perceived similar or easier credit approval stance in the first quarter of 2019, compared with 78% recorded in the previous quarter (Chart 1 in the Annex). 19% of respondents perceived more difficult credit approval stance relative to 6 months ago in the first quarter of 2019, as compared to 22% in the previous quarter.

Of those respondents with existing credit lines, 90% reported that banks’ stance on existing credit lines was easier or unchanged in the first quarter of 2019, up from 84% recorded in the previous quarter (Chart 2 in the Annex). 10% of respondents reported tightened banks’ stance on existing credit lines in the first quarter of 2019, as compared to 16% in the previous quarter.

The Survey also gauged the results of new credit applications from SMEs. 1.3% of respondents reported that they had applied for new bank credit during the first quarter of 2019. For respondents who already know their application outcomes, 97% reported fully or partially successful applications, up from 94% in the previous quarter; the proportion of respondents that reported fully successful applications slightly dropped to 55% from 57% in the previous quarter (Chart 3 in the Annex). The proportion of respondents that reported unsuccessful application dropped from 6% to 3%. It should be noted that owing to a small sample size (i.e. 1.3% of surveyed SMEs), the results on new credit applications from SMEs could be prone to large fluctuations. Care should be taken when interpreting the survey results.

About Survey on Small and Medium-Sized Enterprises (SMEs)’ Credit Conditions

In light of the importance of SMEs to the Hong Kong economy and concerns about potential funding difficulties facing SMEs over the past few years, the HKMA has appointed the Hong Kong Productivity Council (HKPC) to carry out this Survey, starting from the third quarter of 2016. This Survey is conducted on a quarterly basis, covering about 2,500 SMEs from different economic sectors each time. The results of this Survey can help monitor the development of SMEs’ access to bank credit from a demand-side perspective.

The results of this Survey should be interpreted with caution. Similar to other opinion surveys, views collected in this Survey may be affected by changes in sentiment due to idiosyncratic events that occurred over the Survey period, which can make the results prone to fluctuations. Readers are advised to interpret the results together with other economic and financial information. In addition, views collected are limited to the expected direction of inter-quarter changes (e.g. “tighter”, “similar” or “easier”) without providing information about the magnitude of these changes.

Detailed tables and technical information of this Survey are published on the website of the HKPC (http://smecc.hkpc.org).

Hong Kong Monetary Authority
6 May 2019