HKMA announces measures to help SMEs
The Hong Kong Monetary Authority (HKMA) on Thursday announced a series of measures to help small and medium-sized enterprises (SMEs) stay afloat, including not requiring early repayments from borrowers who make their mortgage payments on time. Other measures include allowing a transition period of at least six months for credit limit adjustments and speeding up the handling of applications for the 80% and 90% Guarantee Products.  Justin Chan, the acting chairman of the Association of Banks, said banks would not recall loans early because of a drop in property prices. "Some people are worried that banks will require mortgage borrowers to repay their loans early due to a decline in collateral prices, or 'call loan'. As long as the customer continues to repay... there will be no requirement for early repayment. The measures apply to all assets, not just property loans," he said. Leading local banks HSBC, Standard Chartered and Bank of China (Hong Kong) welcomed the announcement, saying they will beef up support for SMEs. Another measure is to have banks consider extending the duration of partial principal repayment, or even offer principal moratorium. This rule also applies to loans for taxis, minibuses and commercial vehicles taken out in an individual capacity. Welcoming the move, chairman of the Hong Kong Taxi and PLB Association Chow Kwok-keung said the operating costs of taxis have increased in light of high interest rates and rising insurance expenses. In all, the HKMA unveiled nine measures "to assist SMEs in navigating a complex and ever-changing operating environment and to increase their bargaining power relative to banks," it said in a statement.