UDF-Space’s Post

Hong Kong Monetary Authority (HKMA) introduced 9 measures to support Small & Medium-sized Enterprises (SMEs) in Hong Kong: 1) Do not demand early repayments from mortgage borrowers who make payments on schedule, 2) At least 6 months for credit limit adjustments including changes to collateral value, 3) Expedite applications for 80% & 90% guarantee products, 4) Apply pre-approved principal payment holiday scheme to support SMEs with difficulties, 5) More credit products & support services, 6) Lower interest charges & fees, 7) HKMA will create dedicated webpage on SME lending services by banks, 8) Banks to assist clients to switch banks, and 9) Banking associations to arrange meetings between banks & SMEs to enhance services.  Read - https://lnkd.in/gqJEj8P6 follow Caproasia | Driving the future of Asia The Hong Kong Monetary Authority (HKMA) has introduced 9 measures to support Small & Medium-sized Enterprises (SMEs) in Hong Kong: 1) Do not demand early repayments from mortgage borrowers who make payments on schedule, 2) At least 6 months for credit limit adjustments including changes to collateral value, 3) Expedite applications for 80% & 90% guarantee products, 4) Apply pre-approved principal payment holiday scheme to support SMEs with difficulties, 5) More credit products & support services, 6) Lower interest charges & fees, 7) HKMA will create dedicated webpage on SME lending services by banks, 8) Banks to assist clients to switch banks, and 9) Banking associations to arrange meetings between banks & SMEs to enhance services.  HKMA (28/3/24): “The Hong Kong Monetary Authority (HKMA), together with the Banking Sector SME Lending Coordination Mechanism (Mechanism), announced today (28 March) a series of measures to assist small and medium-sized enterprises (SMEs) in obtaining financing from banks and to support their continuous development.  SMEs are the bedrock of the Hong Kong economy and an important customer segment for banks. In 2023, the 11 participating banks in the Mechanism together approved over 110,000 loans to SMEs, involving an aggregate facility limit of over HK$450 billion.  Although the local economy has been recovering gradually, some SMEs are still facing challenges in their operations. Taking into account the views of the commercial sectors, the Mechanism decided to launch the following nine measures to assist SMEs in navigating a complex and ever-changing operating environment and to increase their bargaining power relative to banks.”

SMEs… the backbone of any economy. SMEs foster jobs and wealth creation, innovation, competition, positive disruption, inclusiveness, societal and environmental development. Together with respective governments, Banks play a significant role in enabling growth in this segment. SMEs can be a very significant source of New to Bank acquisitions. Both Digital and Universal Banks support SMEs via financing, cashflow, business advisory and other peripheral services (eg Employee Banking and MPF (for HK)). With innovations in digital processing, IoT, Big Data and AI, we can look to more accurate risk management, greater client coverage (including sole proprietors), shorter onboarding and credit approvals timelines. This in turn opens up new opportunities for insurance / Bancassurance, which is still relatively under-penetrated. Think about it... the corporate customer segment is the only segment that cuts across Mass, Mass Affluent, HNW and UHNW individuals, as well as small, medium enterprises and large corporate entities. Whilst most banks only focus on each customer segment separately, most try to bridge between retail and UHNW individual segments, but synergising with SME Banking is still rare to see. Both SG and HK have streamlined regulations and open up economies focusing on core industries, trade and connectivity, capital access, foreign investments, whilst developing / attracting skilled workforce. Banks that can synergise SME segment growth across their Individual segment coverage will have a strong advantage to HUNT and FARM BOTH of these corporate and individual relationships. I’ve come to respect the Bankers from the SME segment as some of the most technical, commercial minded, practical and driven individuals. Likewise, Business Insurance Specialists in this area needs to be conversant in the technicalities of business continuity and risk management, Life and GI, as well as individual needs across the wealth spectrum to have the flexibility to cut across industries, customer segments, and be able to support/partner with these SME experts to structure solutions for their customers. Investing in this Segment, and setting ambitious Bancassurance aspirations, will guarantee manifold returns, not just in terms of increased customer engagement and acquisition, but also strengthening of relationships across all customer spectrums. Key is execution. And in turn, this supports a healthy social inclusion, economic growth, an innovative landscape and positive wealth progression in each country, whilst shaping the future and growth in the region. #SMEBanking; #Bancassurance, #Caproasia

Hong Kong Monetary Authority (HKMA) introduced 9 measures to support Small & Medium-sized Enterprises (SMEs) in Hong Kong: 1) Do not demand early repayments from mortgage borrowers who make payments on schedule, 2) At least 6 months for credit limit adjustments including changes to collateral value, 3) Expedite applications for 80% & 90% guarantee products, 4) Apply pre-approved principal payment holiday scheme to support SMEs with difficulties, 5) More credit products & support services, 6) Lower interest charges & fees, 7) HKMA will create dedicated webpage on SME lending services by banks, 8) Banks to assist clients to switch banks, and 9) Banking associations to arrange meetings between banks & SMEs to enhance services. Read - https://lnkd.in/gZbzMMxM follow Caproasia | Driving the future of Asia The Hong Kong Monetary Authority (HKMA) has introduced 9 measures to support Small & Medium-sized Enterprises (SMEs) in Hong Kong: 1) Do not demand early repayments from mortgage borrowers who make payments on schedule, 2) At least 6 months for credit limit adjustments including changes to collateral value, 3) Expedite applications for 80% & 90% guarantee products, 4) Apply pre-approved principal payment holiday scheme to support SMEs with difficulties, 5) More credit products & support services, 6) Lower interest charges & fees, 7) HKMA will create dedicated webpage on SME lending services by banks, 8) Banks to assist clients to switch banks, and 9) Banking associations to arrange meetings between banks & SMEs to enhance services. HKMA (28/3/24): “The Hong Kong Monetary Authority (HKMA), together with the Banking Sector SME Lending Coordination Mechanism (Mechanism), announced today (28 March) a series of measures to assist small and medium-sized enterprises (SMEs) in obtaining financing from banks and to support their continuous development.  SMEs are the bedrock of the Hong Kong economy and an important customer segment for banks. In 2023, the 11 participating banks in the Mechanism together approved over 110,000 loans to SMEs, involving an aggregate facility limit of over HK$450 billion.  Although the local economy has been recovering gradually, some SMEs are still facing challenges in their operations. Taking into account the views of the commercial sectors, the Mechanism decided to launch the following nine measures to assist SMEs in navigating a complex and ever-changing operating environment and to increase their bargaining power relative to banks.”

Why are so many lenders asking for ANZSIC Codes? Over the last 12-24 months, so many banks & business lenders have been asking us to solve a market problem: they needed ANZSIC Codes with a higher coverage, and better accuracy, than what was currently available. CreditorWatch has now solved this problem What is an ANZSIC Code? Australia & New Zealand Standard Industry Classification(ANZSIC). These are used to categorise a business by its industry. Each business will have at least one Industry that it primarily participates in Why do lenders want better ANZSIC Codes? There are three reasons predominantly: 1. The Australian Prudential Regulation Authority (Australian Prudential Regulation Authority) As part of APRA's oversight of Australian lenders, it needs to understand the value of a bank's exposure by industry 2. AUSTRAC As part of an Anti Money Laundering / Counter Terrorism Financing (AML/CTF) Risk Assessment, a "reporting entity" (which includes business lenders and business deposit takers) must assess the level of risk presented by the industry of a subject entity, and across their portfolio. Some industries have a higher propensity for Money Laundering than others 3. Aggregate Lending Limits / Lending Mandates / Credit Policies: Lenders will almost always have to adhere to a set of requirements that have been mandated by their sources of funds, including maximum lending limits by industry Reach out to CreditorWatch and find out how we can help you to meet your APRA, AUSTRAC, and Credit Policy requirements around ANZSIC Codes Australian Banking Association (ABA) Reserve Bank of Australia Arca Australian Finance Industry Association ACAMS The Australian Financial Review

Data shared exclusively with City A.M. has suggested that big banks are set to withdraw even further from funding small and medium-sized enterprises (SMEs) this year, as high street lenders face criticism for prioritising larger firms. More than three-quarters (77 per cent) of SME finance brokers believe high street banks would reduce their appetite to fund small businesses, according to a quarterly survey by online credit provider iwoca. The figure remained unchanged from the previous quarter as brokers observed a widening funding gap for SMEs after lending spiked during the Covid-19 pandemic. Almost nine in 10 brokers (86 per cent) thought demand for SME finance would rise over the next six months. ✍️ Lars Mucklejohn Read the full story here 👇 https://lnkd.in/eUUmumCP

Multitude Bank acquires 9.9% stake in Norway-based Lea bank Malta-based #Multitude Bank has announced the acquisition of a 9.9% stake in Norway's #LEA Bank ASA, a digital bank specializing in consumer financing across the Nordic countries and Spain. Additionally, Multitude Bank has signed an agreement to acquire an extra 8.7% stake, pending approval from the Norwegian and Swedish Financial Supervisory Authorities. If approved, this would make Multitude Bank the largest shareholder of LEA Bank, with a total stake of approximately 18.6%. The investment, amounting to around €15 million and financed through Multitude Bank's liquidity reserves, reflects the bank's strategic move to expand its operations through targeted investments and partnerships. Antti Kumpulainen CEO of Multitude Bank plc, commented that both banks are "highly complementary players in the European market," sharing a focus on digital innovation, data-driven decision-making, and a consumer-centric approach. He also highlighted the significant potential for cooperation between the two institutions. Founded in 2016, LEA Bank ASA operates primarily in consumer loans and deposit products. The bank serves over 70,000 customers in Norway, Sweden, Finland, and Spain with consumer loans, and offers deposit products to clients in Norway, Germany, Spain, Austria, and France. Employing 48 staff members, LEA Bank is well-positioned for further expansion in Europe. Notably, the bank plans to relocate its headquarters to Sweden in the coming year, having obtained a Swedish banking license in June 2024, and intends to transition from the Oslo Stock Exchange to a Nasdaq Stockholm listing by 2025. The article on WhosWho.mt in the first comment.

SBP increases clean lending limit for SMEs by 100% The State Bank of Pakistan (SBP), in order to facilitate small and medium-sized enterprise (SME) sector's access to finance, has increased the clean lending limit by 100% to Rs10 million. Accordingly, the SBP has made amendments in the Regulation SME R-4 of Prudential Regulations for SME Financing. As per amendment in the SME R-4 titled “Limit on Clean Facility”, banks & DFIs can take clean exposure (facilities extended based on cashflows of an SME secured solely against personal guarantees) of up to Rs10m on an SME borrower. It may be noted that the clean exposure limit shall not include the clean consumer financing limits (Credit Card and Personal Loans etc.) allowed to a sponsor of the said SME under Prudential Regulations for Consumer Financing”. The central bank has advised banks and DFIs to ensure circulation of above amendment among all their offices/ branches for meticulous compliance in letter and spirit. Non-compliance of Prudential Regulations will lead to punitive action under the relevant provisions of BCO, 1962, the SBP said.SBP increases clean lending limit for SMEs by 100% SBP increases clean lending limit for SMEs by 100% 10:15 August 19, 2024 Join Our Whatsapp Channel FacebookTwitterLinkedInWhatsAppEmailShare August 19, 2024 (MLN): The State Bank of Pakistan (SBP), in order to facilitate small and medium-sized enterprise (SME) sector's access to finance, has increased the clean lending limit by 100% to Rs10 million. Accordingly, the SBP has made amendments in the Regulation SME R-4 of Prudential Regulations for SME Financing. As per amendment in the SME R-4 titled “Limit on Clean Facility”, banks & DFIs can take clean exposure (facilities extended based on cashflows of an SME secured solely against personal guarantees) of up to Rs10m on an SME borrower. It may be noted that the clean exposure limit shall not include the clean consumer financing limits (Credit Card and Personal Loans etc.) allowed to a sponsor of the said SME under Prudential Regulations for Consumer Financing”. The central bank has advised banks and DFIs to ensure circulation of above amendment among all their offices/ branches for meticulous compliance in letter and spirit. Non-compliance of Prudential Regulations will lead to punitive action under the relevant provisions of BCO, 1962, the SBP said.

CO-LENDING BY BANKS AND NBFCs TO PRIORITY SECTOR offers win win situation. RBI vide Circular no. RBI/2020-21/63 (FIDD.CO.Plan.BC.No.8/04.09.01/2020-21 dated 05.11.2020) have issued guidelines on “Co-Lending Model” (CLM) by Banks and NBFCs. The objective is to improve the flow of credit to the unserved and underserved sector of the economy and make available funds to the ultimate beneficiary at an affordable cost, considering the lower cost of funds from Banks and greater reach of the NBFCs. In terms of the Co-lending Model (CLM), Bank is permitted to co-lend with all registered NBFCs (including HFCs) based on a prior agreement, named as Master Agreement (MA). The MA to be entered between the two shall inter-alia include, terms and conditions of the arrangement, the specific product lines and areas of operation, along with provisions related to segregation of responsibilities as well as customer interface and protection issues. NBFCs is required to retain a minimum of 20 per cent share of the individual loans on their books under Co-lending framework. The banks can claim priority sector status in respect of their share of credit while engaging in the CLM. A. Objective and Mutual Benefit of Co-lending by Banks and NBFCs Ø Creation of New Loan Book: The reach of the NBFCs among the local population helps them to assess their financial needs and can help in increasing the Bank’s loan portfolio in these areas. NBFCs has the ability to originate fresh loans in different loan categories in all segments for creation of priority sector assets as per a prior master agreement with the Bank. Ø Support in Follow-up & Recovery: NBFCs has the capability and resources to provide support in post sanction follow-up and recovery. It helps in increasing the Bank’s reach and business without increasing pressure on their branches, while keeping operating costs down. Ø Lower NPA Rates: With strong and effective recovery mechanism, NBFCs usually have low levels of NPAs for activities where the Banks have traditionally struggled with relatively higher NPAs in small ticket size loans. Ø Priority Sector Lending: This Co-lending arrangement is meant to co-lend loans for the exclusive creation of priority sector assets. The co-lending of loans enable the Bank to meet the PSL requirements in a convenient and more organised manner by sharing risks and rewards between the NBFCs and the Bank. Priority sector lending will be as defined by the extant RBI guidelines in force. B. Other Operational Aspects as per RBI Guidelines The co-lending Banks and NBFCs shall maintain each individual borrower’s account for their respective exposures. However, all transactions (disbursements/ repayments) between the banks and NBFCs relating to CLM shall be routed through an escrow account maintained with the banks, in order to avoid inter-mingling of funds. The co-lenders shall establish a framework for monitoring and recovery of the loan, as mutually agreed upon.

MYbank used to offer consumer loans for individuals and business loans for micro and small businesses. However, in recent years it has put the brakes on its consumer loan business, one of its main growth engines, after regulators asked Ant Group to rectify its businesses to reduce risks. Lending to micro and small businesses proved tricky amid China’s sluggish economic recovery last year, which led to rising default risks, MYbank said in its report. Meanwhile, retail loans remained the backbone of WeBank and XWBank’s lending, accounting for approximately 55% and 81%, respectively, of their outstanding loans at the end of last year. MYbank reported a 4.2 billion yuan ($596 million) net profit last year, up 18.8% from 2022. That lagged behind WeBank with 10.8 billion yuan, up 21%. XWBank’s net profits surged 48% to 1 billion yuan. Regurg

After successfully opening a business account, one might expect that the process to apply for loans would be intuitive and straightforward. However, as revealed in our latest report, the reality is far from simple. MONETISATION When it comes to SME loan applications, traditional banks typically rely on hybrid or offline methods, whereas virtual banks and NBFIs offer more flexible options, including both hybrid and fully online approaches. Despite this, our research indicates that all three types of lenders take significantly longer than their advertised durations to process and approve SME loans, with processing periods usually ranging from 6 to 10 weeks, reflecting hidden operational inefficiencies. Compared to virtual banks and NBFIs, traditional banks have more complex document requirements, including tax documents, employee records, and personal guarantee records, resulting in extended processing times. MAINTENANCE Following the disbursement of loans, lenders conduct regular account reviews to ensure SMEs' financial stability and adjust loan terms accordingly. However, this process proves time-consuming and burdensome for SMEs, involving document submissions, interviews, on-site visits, collateral evaluations, and potential modifications. Account reviews occur regularly and randomly, with SMEs often undergoing semi-annual reviews and completing specialised documents. RETENTION SMEs have limited engagement with their lenders, with most failing to deliver proactive initiatives and/or events. The fact is, many SME lenders do not provide advisory support, community events, educational materials, and relevant market insights to their SME customers. As a result, many SMEs in Hong Kong are open to obtaining loans from alternative lenders, driven by their ability to offer more favourable terms, such as lower interest rates, better service, and a seamless digital experience, even if the SME does not have an existing banking relationship with the alternative providers. What are your thoughts on these challenges faced by SMEs throughout their loan application and usage journey? Share your insights below! To explore solutions to these challenges, download our recent report: https://lnkd.in/gRNZstuh For more insights on how we can help you streamline SME lending operations, reach out to our team at [email protected]. #SME #Lending #SMELending #SMEFinancing #Banks #NBFI #HKloans #SMEloans #Businessloans #SMEbanking #Algobasedlending