Hong Kong Monetary Authority: The credit conditions for small and medium-sized enterprises in Hong Kong remained stable in the second quarter.

On August 1, the Hong Kong Monetary Authority (HKMA) released the results of the "Small and Medium Enterprise Loan Situation Survey for the second quarter of 2025". The survey showed that the credit conditions for small and medium-sized enterprises in Hong Kong remained stable overall. Regarding the perception of small and medium-sized enterprises towards the approval stance of banks for loans, excluding respondents who answered "no opinion/do not know", 65% believed that the approval stance of banks in the second quarter of 2025 was "no different" or "easier" compared to six months ago, lower than the 75% from the previous quarter. 35% believed that the approval stance of banks was "more difficult", compared to 25% in the previous quarter. The perception of loans being more difficult does not necessarily reflect actual difficulties faced by small and medium-sized enterprises in borrowing, but can be influenced by various factors (such as media/news reports, business operations, and opinions of friends and family). Among the respondents who had been approved for loans, 1% indicated that banks had "tightened" their stance on their loans, a decrease from 5% in the previous quarter. In this survey, the tightening of loans could include various possibilities, such as reducing credit lines and loan amounts, increasing interest rates, adding collateral requirements, or shortening loan terms. Therefore, respondents indicated that the stance of banks towards their loans does not directly reflect the actual lending to small and medium-sized enterprises by banks. The survey also collected results on new loan applications from small and medium-sized enterprises. 3% of respondents said they had applied for new loans from banks in the second quarter of 2025. Among respondents with known application results, 67% said their applications were either fully successful or partially successful, lower than the 79% from the previous quarter. Due to the small number of small and medium-sized enterprises who had been approved for loans and who had applied for new loans during the quarter, accounting for only 16% and 3% of the surveyed small and medium-sized enterprises respectively, the survey results may fluctuate significantly, and caution should be taken when interpreting them.