Letters | Hong Kong could look beyond big banks to help small businesses
Readers discuss efforts to boost lending to SMEs, and the benefit of focusing on the precious metal trade
One of the biggest hurdles to growth faced by SMEs is securing working capital and trade finance loans. While banks and financial institutions have been instrumental in offering long-term business loans, there is an opportunity to collaborate with the city’s alternative lenders. These additional options offer a more diversified risk appetite and leverage real-time data, enhancing access to short-term financing for businesses.
This is why in recent years financial technology companies in the alternative lending space have grown as they step in to fill this gap. These companies have built proprietary risk models and are harnessing different types of data to provide billions of dollars in small business financing, covering sectors ranging from cross-border e-commerce to construction subcontractors.
It would be beneficial for the HKMA to also consider collaborating with the city’s alternative sector so that together we can holistically address the financing needs of our city’s SMEs.
Hay Yip, chief strategy officer and chief of staff, FundPark