Commerce Secretary Gregory So Kam-leung is believed to have written a letter to local banks asking them to be more supportive of the city’s small and medium-sized enterprises (SMEs).
The senior government official called on lenders to take into consideration, when they review loan applications, the operational pressure that SMEs are facing due to the tough economic environment and various uncertainties, the Hong Kong Economic Journal reported Monday, citing sources.
Hong Kong is home to more than 300,000 SMEs, with the figure representing over 98 percent of the total registered companies in the city. The SMEs hire close to 1.3 million people.
Hong Kong General Chamber of Small and Medium Business warns that the SME segment could see a slew of business closures if banks become more stringent on credit expansion.
Hong Kong economy, and its retail sector in particular, have been facing headwinds in the recent past.
The city saw its total retail sales for the first two months of this year slide 13.6 percent from a year earlier, a worse showing compared to even that seen during the 2003 SARS epidemic and the 2009 global financial crisis.
Still, banks have tightened grip over loan repayments, taking follow-up actions on payments that are 14 days overdue compared with one-month waiting period before, according to the report.
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