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.
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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.
Frank Fang, HSBC’s general manager and head of commercial banking for Hong Kong and Macau. Photo: HSBC alt=Frank Fang, HSBC’s general manager and head of commercial banking for Hong Kong and Macau. Photo: HSBC>
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.
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.
In March 2024, HSBC announced a range of offers and dedicated services to SME customers in response to the support measures introduced by the HKMA.
More than 7,000 HSBC SME customers have taken advantage of interest rebates, fee waivers, access to new facilities and various loan extension arrangements.
“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.”
This article originally appeared in the South China Morning Post (SCMP), the most authoritative voice reporting on China and Asia for more than a century. For more SCMP stories, please explore the SCMP app or visit the SCMP’s Facebook and Twitter pages. Copyright © 2024 South China Morning Post Publishers Ltd. All rights reserved.
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