No matter what business you are in, you would not expect your business growth to be limited by lacking of funds. Whether you want to expand your business, purchase new equipment, hire additional staff or even explore new markets, you need capital. For small and medium enterprises (SMEs), the available sources of funding usually include self-funding by the owner, government subsidies or bank loans. The first option is undoubtedly challenging for small business owners, and the latter two also come with their own hurdles.
SMEs Perceive Loans as Difficult
The Hong Kong Monetary Authority commissioned the Hong Kong Productivity Council to conduct a survey on the lending situation for SMEs. The survey collected opinions from approximately 2,500 senior executives of SMEs regarding their company’s loan situation. The results for the second quarter1 in 2023, published in August 2023, shows that 22% of respondents (excluding those who answered “no idea / don’t know”) felt that the approval process for bank loans was “more difficult” compared with six months ago, indicating that more than one-fifth of people perceive difficulties in obtaining loans for SMEs.
The survey also gathered results on new loan applications by SMEs. Among the respondents, 4% stated that they had applied for new loans from banks in the second quarter of 2023. Among those who knew the outcome of their application, 13% indicated that their application was unsuccessful. This figure has been consistently remained above 10% since 2022, which suggests that some SMEs face difficulties in applying for loans.
Commercial Data Exchange Facilitates SME Financing
When SMEs apply for bank loans, they often required to provide large amount of documentation, including financial statements, bank statements, and even business plans. For companies with limited manpower or being newly established, organising these documents would be a challenge.
In October 2022, the Hong Kong Monetary Authority launched the Commercial Data Interchange (CDI) initiative, which aims to enable more efficient financial intermediation in the banking system and enhance financial inclusion in Hong Kong. The program provides connectivity between each bank and data providers, eliminating the need for banks to establish point-to-point connections with each data source. QFPay HK is one of the first data providers participating in this program. If a company chooses QFPay HK as its acquiring partner, banks can access its transaction data with the company’s consent. This can speed up the loan approval process and help the business improve its cash flow and sustain growth.
For SMEs in need of financing, you can learn more about our loan services in collaboration with banks or contact us for more information.
1 Hong Kong Monetary Authority, Survey on Small and Medium-Sized Enterprises (SMEs)’ Credit Conditions for Second Quarter 2023, 1 August 2023 (https://www.hkma.gov.hk/eng/news-and-media/press-releases/2023/08/20230801-4/)
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