HSBC targets China tech start-ups with 2bn yuan loan scheme offering lower rates, fee waivers

HSBC has launched a 2 billion yuan (US$290 million) lending scheme for what it calls “innovative” companies in China, a sign that traditional lenders eye the country’s burgeoning technology start-ups.

The programme, targeting tech start ups and other firms taking innovative initiatives in southern Guangdong province, is the latest effort by the long-established but struggling lender to capitalise on China’s entrepreneurial industry for growth.

Guangdong is home to China’s version of Silicon Valley – the city of Shenzhen – where companies such as Tencent, Huawei and drone maker DJI emerged and grew into world-leading technology behemoths. There are also hundreds of smaller players experiencing rapid growth but thirsty for cash to fuel their momentum.

Rather than turning to traditional financiers such as HSBC or Bank of China, a majority of Chinese start-ups opt to raise funds from venture capitalists and private equity firms, before some of them take a step further to list their shares in Shenzhen or via a Nasdaq public offering.

HSBC said the new loan facility would offer “preferential interest rates” and service fee waivers to participants, allowing them also to connect with industry leaders through forums and other events.