Hong Kong’s three note-issuing banks — HSBC, Standard Chartered Bank, and Bank of China (Hong Kong) — pledged to deliver loan and mortgage verdicts within two weeks, a move that could potentially ease the financing burden on small and medium-sized enterprises amid economic headwinds.
“The three banks have agreed to respond with approval results within two weeks if applicants have prepared all required documents,” Hong Kong Monetary Authority Chief Executive Eddie Yue Wai-man said at a press conference on Friday.
Yue, along with the Hong Kong Association of Banks, jointly revealed on Friday the establishment of a special task force focused on enhancing mortgage approval processes.
Yue said the steering group will review and handle individual cases of financing difficulties for SMEs. After receiving and examining the cases, the HKMA will refer them to banks as appropriate.
“We will engage with other bank representatives to discuss mortgage approval processes in detail,” Yue said. “The aim is to encourage all banks to adopt the ‘two-week turnaround’ commitment for mortgage approvals.”
He added that if common issues are identified in some cases, the task force will discuss them and propose solutions to banks.
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The group aims to enhance communication among the HKMA, banks, and the business community to better understand SMEs’ needs and provide support for their business development and transformation.
The task force’s creation follows discussions on improving the efficiency, transparency, and customer experience of the mortgage and loan approval workflow.
Yue acknowledged operational challenges among SMEs amid external uncertainties and reaffirmed the financial regulators’ commitment to supporting small and medium-sized enterprises.
The HKMA has been communicating with 20 local commercial chambers to learn about their needs, he said.
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He added that the three note-issuing banks have maintained their risk appetite for SME lending, and the nine measures introduced in March will continue.
The measures include banks not demanding early repayments from mortgage customers who repay on schedule, and not adjusting credit limits solely based on changes in the value of the borrowers’ collateral.
About 14,000 SMEs have benefited from these nine measures, involving credit facilities totaling over HK$31 billion ($4 billion), according to Yue.
Chief Executive Officer of HSBC Hong Kong Luanne Lim said about 3,500 HSBC SME customers have benefited from interest rebates and other service fee concessions.
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Sun Yu, vice-chairman and chief executive at Bank of China (Hong Kong), said that the BOCHK credit policy for SMEs remains unchanged.
Chairman of the Chinese General Chamber of Commerce Jonathan Choi Koon-shum, said headwinds such as weak consumer sentiment, market volatility, and asset price adjustments have increased pressures on local businesses. Many SMEs are facing fundraising difficulties and other related issues.
Choi suggested the financial authorities further optimize the SME Financing Guarantee Scheme to address SME’s funding and operational cash flow. This could include lowering loan interest rates, providing more interest subsidies for different guarantee products, and considering making the relevant guarantee schemes permanent.
