Hong Kong Monetary Authority calls on lenders to provide ‘sympathetic’ credit relief to SMEs, never call loans early
- Plan offers reassurance about access to credit relief amid market rumours of loans being called early
- Banking Association and banks including HSBC and Standard Chartered voice support for the measures
The Hong Kong Monetary Authority (HKMA) on Thursday announced a set of measures designed to support small and medium-sized enterprises (SMEs), offering them reassurance about access to credit relief amid market rumours of loans being called early.
The nine points issued by the city’s de facto central bank, together with the Banking Sector SME Lending Coordination Mechanism, declared that banks involved in the mechanism must “never demand” early repayment from mortgage customers who repay on time.
Moreover, banks must offer a transition period of at least six months for credit-limit adjustments under certain conditions and “be sympathetic in providing suitable credit relief” to SMEs facing difficulties, including offering payment holidays and loan restructuring to ease cash-flow pressure, the HKMA said.
“SMEs are the bedrock of the Hong Kong economy and an important customer segment for banks,” HKMA said in a statement. “Although the local economy has been recovering gradually, some SMEs are still facing challenges in their operations.”
The measures are being rolled out to “assist SMEs in navigating a complex and ever-changing operating environment and to increase their bargaining power relative to banks”, the HKMA said.