More SMEs find credit approval eased in Q2: Survey

Some 72% of SMEs perceived banks’ credit approval stance as easier.

Around 72% of small and medium enterprises perceived a similar or easier credit approval stance in the second quarter of the year, up from 70% in the previous quarter.

In its second-quarter (Q2) survey on SMEs Credit Conditions, the Hong Kong Monetary Authority (HKMA) found those that perceived it to be more difficult also dropped to 28% from 30%.

“The perception of 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, business conditions, and opinions of relatives and friends,” the HKMA said in the report.

Of respondents with existing credit lines, 97% reported that banks’ stance on existing credit lines was easier or unchanged, compared with 93% in the previous quarter.

Only 3% of the respondents reported tighter banks’ stance on existing credit lines in Q2 2021, down from 7%.

The HKMA noted that in the survey, a tighter stance on existing credit lines denotes a range of possible measures or arrangements, which could mean respondents’ indication of banks’ stance on existing credit lines may not directly reflect banks’ supply of credit to SMEs.

Moreover, 6% of the respondents reported that they had applied for new bank credit during Q2 2021.

Amongst the respondents who had already known their application outcomes, 91% reported fully or partially successful applications, down slightly from 92; whilst 9% reported unsuccessful applications, inching up from 8%.