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

The Hong Kong Monetary Authority (HKMA) announced the results of the "Survey on the lending conditions of small and medium-sized enterprises (SMEs)" for the first quarter of 2026 today (May 4). The survey shows that the credit conditions for Hong Kong SMEs have remained stable. Regarding the perception of SMEs on the approval attitude (i.e. ease or difficulty) of bank loans, excluding respondents who answered "no opinion/unknown," 73% believe that the approval attitude of banks for loans in the first quarter of 2026 is "no different" or "easier" compared to six months ago, higher than the 70% in the previous quarter. 27% believe that the bank's approval attitude is "more difficult," compared to 30% in the previous quarter. The perception of loans being more difficult does not necessarily reflect actual difficulties encountered by SMEs in borrowing, but may be influenced by factors such as media/news reports, business operating conditions, and opinions of relatives and friends. Among the respondents who have been approved for loans, 0% stated that banks have "tightened" their loan conditions, a decrease from 1% in the previous quarter. In this survey, "tightened loans" can mean various possibilities, such as reducing credit lines and loan amounts, increasing interest rates, adding collateral requirements, or shortening loan terms. Therefore, respondents believe that the bank's approval attitude towards their loans does not directly reflect the actual loans provided to SMEs by banks. The survey also collected results on new loan applications for SMEs. 2% of respondents stated that they had applied for new loans from banks in the first quarter of 2026. Among the respondents who knew the outcome of their applications, 91% said that their applications were fully or partially successful, higher than the 77% in the previous quarter. Due to the small number of SMEs that have been approved for loans and those who have applied for new loans within the quarter, accounting for only 12% and 2% of the surveyed SMEs respectively, the survey results may show significant fluctuations, and caution should be exercised when interpreting them.