Legislators yesterday urged the Hong Kong Monetary Authority to ensure banks do not unfairly deny loans to businesses after a commercial credit reference agency opens this year. Fears were raised at Legco that many of the city's more than 200,000 small and medium-sized enterprises (SMEs) will find it more difficult to secure loans when information on the database is shared by banks. HKMA officials told lawmakers the proposed agency would start to collect credit information in September and provide services by the end of this year. The agency - to be run by a private entity - will collect all credit information on SMEs from banks and allow all banks to share this information. Records will include details such as overdue loan repayments. The database will include all unlisted companies with an annual turnover of less than $50 million. Legislator Philip Wong Yu-hong, who represents the business sector, said he had reservations over the credit agency. 'Companies which already have bank loans from a number of banks will now be exposed,' he said. 'These companies will find it difficult to ask for more new loans after the agency starts operating.' Chan Kam-lam, economic affairs spokesman for the Democratic Alliance for the Betterment of Hong Kong, said he was concerned that banks would pass on to companies the access fees charged by the credit agency. HKMA executive director Arthur Yuen said the credit agency would help enhance transparency and thus encourage banks to lend more to these companies. 'Many banks now reject lending to the SMEs as the lenders do not have sufficient information to assess their credit risks. Many banks now only lend money to the SMEs if they can provide properties or other assets as collateral,' Mr Yuen said. Legislator Ng Leung-sing, who works in the banking sector, said the credit data would provide an incomplete picture for banks, given that records will begin with the start-up of the agency. Mr Yuen said the absence of retrospective data was a compromise to win support for the agency.