HKMA to help banks assess firms for trade financing by using cargo data The Hong Kong Monetary Authority (HKMA) has launched a new initiative that will use cargo logistics data to help banks assess companies for trade financing amid escalating global worries about tariffs. The initiative, called CargoX, would expand data sets and applications in the de facto central bank’s electronic platform – the Commercial Data Interchange (CDI) – in an effort to make trade financing more readily available to small and medium-sized enterprises (SMEs), the HKMA said on Monday. The move would help SMEs cope with “the current complex international trade situation”, it said. Around a quarter of Hong Kong’s SMEs are involved in import-export trade and wholesale businesses, the HKMA said. “In today’s complex global trade landscape, many businesses, in particular SME traders, need more digitalised and efficient trade finance solutions to transform their business models and supply chains,” HKMA chief executive Eddie Yue Wai-man said. “Leveraging cargo data and our next-generation CDI data infrastructure, CargoX will help resolve some long-standing pain points in trade finance for banks, ultimately boosting efficiency and driving industry-wide innovation.” The CargoX programme will securely share sea, road and air cargo logistics data – with the consent of the companies involved – so that banks can more accurately evaluate their corporate lending. At present, the HKMA is working with data providers including Tradelink Electronic Commerce, the Airport Authority Hong Kong’s HKIA Cargo Data Platform and the Transport and Logistics Bureau’s proposed port community system, which is slated for completion by the end of the year. The system uses blockchain technology to record cargo flows. The HKMA said HSBC Holdings, Standard Chartered Bank and Bank of China (Hong Kong) were among the banks involved in the programme. CargoX’s goals include a reduction in the time it takes for credit to be approved, higher credit limits, a reduction in manual processes and greater product innovation among banks. “One of the major challenges in trade finance is the fragmentation of trade platforms, which makes it difficult to obtain adequate documentation and reliable proof for effective credit assessments,” said Aditya Gahlaut, the head of global trade solutions for Asia at HSBC. The initiative would help banks gain deeper insights into the activities of their clients, Gahlaut said. By the end of the year, a panel of experts is expected to come up with a road map for digitising cargo data and integrating relevant sources into the CDI. Associated studies and the development of new solutions will follow in 2025 and 2026. The panel is made up of representatives from cargo data providers, trade associations, banks, credit reference agencies and government agencies. It met for the first time on Monday. The CDI, launched in October 2022, is an electronic platform that allows 26 banks to use data from 15 providers to determine the creditworthiness of SMEs. The CDI had facilitated more than 42,000 loan applications and reviews, with an estimated credit approval amount in excess of HK$35.4 billion (US$4.6 billion) as of December 2024, according to HKMA data. In August, the HKMA linked the CDI with the Companies Registry to share more data with banks. Earlier this month, the HKMA said it was working with 18 lenders to offer flexible loans to SMEs hit by US tariffs. The banks said they would consider offering extensions of loan repayment periods and partial principal repayment arrangements. https://www.scmp.com/business/banking-finance/article/3308218/hkma-help-banks-assess-firms-trade-financing-using-cargo-data (ICE HONG KONG)

Fonte notizia: South China Morning Post