A lawmaker in Hong Kong has urged banks to increase their financial support for small and medium-sized businesses while also ensuring the stability of the financial system. The call for more compassionate assistance from banks comes after a meeting between the banking industry and the business sector to address the challenges faced by businesses in securing funding.
During an interview on an RTHK programme, Peter Shiu highlighted the growing difficulty that businesses are experiencing in obtaining capital. He noted that in the past, banks were more willing to lend money to companies for their projects. However, in the current economic climate, banks are becoming more cautious during the approval process and asking more questions before granting loans.
Shiu acknowledged that Hong Kong is going through an economic transformation, with many industries struggling to meet their performance targets following the impact of the pandemic and the slow global economy. He emphasized the importance of banks supporting businesses in a more compassionate manner during these challenging times.
The lawmaker also mentioned that there has been some improvement in the previous practice of banks calling in loans and reducing credit limits for companies. He explained that some businesses had faced financial difficulties when property prices dropped, leading banks to demand additional payments or lower credit limits. Shiu expressed the need for a more understanding approach from banks towards businesses facing financial setbacks.
In response to the current situation, Shiu announced that another meeting between the banking industry and the business sector is scheduled to take place later this month. The objective of the meeting is to explore additional ways in which banks can assist the business community and provide the necessary support to help companies overcome financial challenges.
The initiative to encourage banks to offer more compassionate assistance to small and medium-sized enterprises reflects a collaborative effort to promote economic recovery and stability in Hong Kong. By fostering a supportive environment for businesses to access financial resources, the hope is to enable companies to navigate the economic uncertainties and emerge stronger from the current challenges.
