HSBC says SME lending up 27pc

The economic recovery is prompting small and medium-sized enterprises (SMEs) to seek more cash from banks, according to HSBC Holdings, the biggest lender in the city.

Lena Chan, managing director and head of business banking at Hongkong and Shanghai Banking Corp, said SME lending in the first quarter increased 27 per cent from the same period in 2009. She declined to release the figures.

She predicted that loan growth would continue despite the ongoing European debt crisis.

'Not that many local SMEs export goods to those European countries which are in trouble. Many SMEs are exporting to the United States and other Asian countries which aren't affected by the European debt crisis,' Chan said.

'Since Asia and other emerging markets are experiencing high economic growth, this could offset those uncertainties in Europe.'

Intra-Asian trade had grown by an average of 15 per cent annually between 1991 and 2009, which was faster than the average global trade growth of 7.6 per cent during the same period, she said. Increasing cross-border trade between Asian countries meant they did not need to rely solely on the traditional US and European markets.