84% perceived similar or easier credit approval stance in the third quarter of 2022 according to latest survey

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30th November 2022 – (Hong Kong) The Hong Kong Monetary Authority (HKMA) published today the results of Survey on Small and Medium-Sized Enterprises (SMEs)’ Credit Conditions for the third quarter of 2022.
      
Regarding SMEs’ perception of banks’ credit approval stance relative to 6 months ago, excluding respondents who answered “no idea/don’t know”, 84 per cent perceived similar or easier credit approval stance in the third quarter of 2022, similar to 85 per cent in the previous quarter. 15 per cent perceived more difficult credit approval stance, same as that in the previous quarter. The perception of more difficult credit approval stance may not necessarily reflect actual difficulties faced by SMEs in obtaining bank credit as the perception could be affected by a number of factors, such as media/news reports, business conditions and opinions of relatives and friends.
      
  Of respondents with existing credit lines, 88 per cent reported that banks’ stance on existing credit lines was easier or unchanged in the third quarter of 2022, compared with 93 per cent in the previous quarter. 12 per cent of the respondents reported tighter banks’ stance on existing credit lines, compared with 7 per cent in the previous quarter. In this survey, tighter stance on existing credit lines denotes a range of possible measures or arrangements, such as reducing unused and used credit lines, raising the interest rate, imposing additional collateral requirements, or shortening loan tenor. Therefore, respondents’ indication of banks’ stance on existing credit lines may not directly reflect banks’ supply of credit to SMEs. 
      
 The survey also gauged the results of new credit applications from SMEs. 4 per cent of the respondents reported that they had applied for new bank credit during the third quarter of 2022. Among the respondents who had already known their application outcomes, 88 per cent reported fully or partially successful applications, compared with 86 per cent in the previous quarter. 12 per cent reported unsuccessful applications, compared with 14 per cent in the previous quarter.
      
Owing to small sample sizes of SMEs with existing credit lines (18 per cent of surveyed SMEs) and with new credit applications (4 per cent of surveyed SMEs) during the quarter, the results could be prone to large fluctuations, and hence should be interpreted with care.

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