Hong Kong Monetary Authority: The credit conditions for small and medium-sized enterprises in Hong Kong remained relatively stable in the first quarter.

On May 6th, the Hong Kong Monetary Authority (HKMA) released the results of the "Survey on the Financing Conditions of Small and Medium-sized Enterprises in the First Quarter of 2025". The survey shows that the credit conditions for small and medium-sized enterprises in Hong Kong are generally stable. In terms of the perception of the approval attitude of banks towards SME loans, excluding respondents who answered "no opinion/do not know", 75% believe that the approval attitude of banks in the first quarter of 2025 is "no different" or "easier" compared to six months ago, higher than the previous quarter's 70%. 25% think that the banks' attitude is "more difficult", compared to 30% in the previous quarter. The perception of loan difficulty does not necessarily reflect actual difficulties faced by SMEs in borrowing, but can be influenced by various factors (such as media/news reports, business operating conditions, and opinions of family and friends). Among the respondents who have obtained loans, 5% said that the banks have "tightened" their loan approval attitude, slightly higher than 0% in the previous quarter. In this survey, tightening of loans could entail various possibilities, such as reducing credit limits and loan amounts, increasing interest rates, increasing collateral requirements, or shortening loan terms. Therefore, respondents indicate that the banks' loan approval attitudes do not directly reflect the actual lending to SMEs by banks. The survey also collected results on new loan applications by SMEs. 3% of respondents said they had applied for new loans from banks in the first quarter of 2025. Among the respondents who knew the application results, 79% said their applications were either fully approved or partially approved, higher than the previous quarter's 77%. Due to the small number of SMEs that have obtained loans within the quarter and those who have applied for new loans, accounting for only 14% and 3% of the surveyed SMEs respectively, the survey results may be subject to significant fluctuations and should be interpreted with caution.