13% of SMEs find credit approval more difficult

The SMEs' perception jumped 1% compared to the previous quarter.

Around 87% of small and medium enterprises (SMEs) perceived a similar or easier bank credit approval stance in the fourth quarter of 2021, compared with 88% in the previous quarter, the Hong Kong Monetary Authority (HKMA) revealed in the Survey on Small and Medium-Sized Enterprises (SMEs)' Credit Conditions for the fourth quarter of 2021.

Meanwhile, 13% perceived a more difficult credit approval stance, compared with 12% 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 several factors, such as news reports, business conditions and opinions of relatives and friends.  

Of respondents with existing credit lines, 95% reported that banks' stance on existing credit lines was easier or unchanged in the fourth quarter of 2021, and 5% of the respondents reported tighter banks' stance on existing credit lines, broadly similar to the results of the previous quarter

The survey found SMEs' 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 HKMA has appointed the Hong Kong Productivity Council to carry out the survey from the third quarter of 2016. The 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.