HSBC to extend US$641 million in pre-approved loans to aid Hong Kong SMEs HSBC, the biggest lender in Hong Kong, will launch a HK$5 billion (US$641 million) pre-approved financing scheme for small and medium-sized enterprises (SMEs). The initiative seeks to ease access to capital for entrepreneurs who are looking to invest at the beginning of a rate-cut cycle. The bank will grant pre-approved credit limits to eligible existing SME customers – those whose creditworthiness HSBC can assess using its own data, the bank said on Wednesday. HSBC will also extend an offer of a two-month interest rebate of up to HK$10,000 for applicants in the government-backed SME Financing Guarantee Scheme until the end of 2024, from the original deadline of September 30. These initiatives aim to simplify the process for SMEs to get bank loans, as they may consider investing in their businesses as the long rate-hiking cycle draws to a close, the bank’s statement said. HSBC was the first lender to cut its prime lending rate by a quarter point last Friday, its first rate cut since November 2019. “HSBC has been standing by the business community by offering liquidity relief and financing options throughout and beyond the pandemic,” said Frank Fang, HSBC’s general manager and head of commercial banking for Hong Kong and Macau. “Today’s announcement reinforces our commitment to helping SMEs enhance their financial resilience through customer-centric solutions driven by data and technology.” HSBC and 13 other major lenders in Hong Kong earlier this month pledged to keep funding small businesses in the city and quicken their approval review processes. The pledge came after Hong Kong Monetary Authority (HKMA) took action to handle complaints by SMEs about the difficulty of getting bank loans. The commitments followed the first meeting held by the Taskforce on SME Lending on September 5. The task force was formed last month to help overcome the challenges that SMEs are facing amid a slowdown in the economy. “The pre-approved loans from HSBC will definitely be helpful to SMEs that have cash-flow problems,” said Peter Shiu Ka-fai, a lawmaker for the wholesale and retail sector and chairman of the pro-business Liberal Party. “We hope to see more banks follow HSBC to offer similar financing to help SMEs cope with the tough times.” Starting from today, HSBC will inform eligible SME customers about their pre-approved credit limits through digital channels, with limits as low as HK$50,000 available to support small businesses. The funds, repayable over up to five years, will be ready in as little as two working days after application, with no requirement for financial statements or collateral, HSBC said. Dewan Saiful Alam, who has been in the textile trading business since 1999, believes the pre-approved loans can help SMEs in many ways. It can help SMEs expand in new markets, launch new products, or alleviate their financial pressure by restructuring existing debts to lower interest rates or extending repayment terms, he said. Benjamin Quinlan, CEO and managing ­partner of Quinlan & Associates, a Hong Kong-based consultancy, said it is good to see that HSBC has started to use data to approve bank loans. “Hong Kong is a mature financial market but the open data infrastructure is poor,” Quinlan said. “Many banks still use the traditional credit approval process, which involves a lot of documents and papers, a burdensome and lengthy process to go through.” He said banks should develop algorithm lending models based on credit scores to provide speedy approval processes for SMEs. “By enhancing transparency in SME lending, we empower our customers to make informed borrowing decisions for their operational needs or business developments,” Fang said. “We will continue to enhance our data capabilities to provide accessible financing and simple banking services for smaller businesses in Hong Kong.” https://www.scmp.com/business/banking-finance/article/3279832/hsbc-extend-us641-million-preapproved-loans-aid-hong-kong-smes (ICE HONG KONG)

Fonte notizia: South China Morning Post