Hong Kong Monetary Authority: The credit situation for small and medium-sized enterprises in Hong Kong is expected to remain stable in the fourth quarter of 2025.

On February 2nd, the Hong Kong Monetary Authority released the results of the "Small and Medium Enterprises Loan Conditions Survey" for the fourth quarter of 2025. The survey shows that the credit conditions for small and medium enterprises in Hong Kong have remained stable. Regarding the perception of small and medium enterprises on the approval of bank loans (i.e. the level of difficulty), excluding respondents who answered "no opinion/do not know", 70% believe that the banks' approval of loans in the fourth quarter of 2025 is "no different" or "easier" compared to six months ago, higher than the previous quarter's 59%. 30% believe that the banks' stance on loans is "more difficult", compared to 41% in the previous quarter. The perception of loans being more difficult does not necessarily reflect actual difficulties encountered by small and medium enterprises in borrowing, but can be influenced by multiple factors such as media/news reports, business operating conditions, and opinions of relatives and friends. Among the respondents who have been approved for loans, 1% said that the banks have "tightened" their stance on their loans, a decrease from the 3% in the previous quarter. In this survey, loan tightening could mean various things, such as reducing credit limits, increasing interest rates, adding collateral requirements, or shortening the loan term. Therefore, respondents believe that the banks' stance on their loans does not directly reflect the banks' actual lending to small and medium enterprises. The survey also collected information about the results of new loan applications by small and medium enterprises. 2% of respondents said they had applied for a new loan from a bank in the fourth quarter of 2025. Among the respondents who knew the outcome of their applications, 77% said their applications were fully or partially successful, higher than the 72% in the previous quarter. Since the number of small and medium enterprises that have been approved for loans and those who have applied for new loans is small, accounting for only 14% and 2% of the surveyed small and medium enterprises respectively, the survey results may show significant fluctuations and interpretation should be done with caution.