A dozen banks have joined six major lenders in Hong Kong to provide financial support for small and medium-sized enterprises (SME), which account for 98 per cent of the enterprises in the city, to help resolve cash-flow issues.
The Hong Kong Association of Banks (HKAB) said on Monday that a total of 18 banks on the SME lending task force agreed to join the customer financial arrangements negotiation mechanism, with the goal of “helping customers resolve financial difficulties”.
The move comes after six of the city’s biggest banks said last month that they would begin a trial to jointly negotiate customers’ financial arrangements in response to tight cash flows in the construction industry.
SMEs were encouraged to contact lending banks for help when facing sudden liquidity pressures, according to the HKAB. After obtaining the authorisation from the customer, the bank will contact other relevant lenders to discuss the customer’s financial dispositions.
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Banks would handle the situation “as flexibly as possible according to the individual customer’s situation” to reduce the pressure on their liquidity, the HKAB said.
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