Approved SME loans drop 61% y-o-y

Newly-approved small and medium-sized enterprise (SME) credit dropped 37.5% to MOP7.6 billion in the first half of 2022 compared to six months prior. 

The figure is a significant plunge of 61% compared to the same period last year, according to statistics released yesterday by the Monetary Authority of Macao.

The pandemic has resulted in downturns in the city’s businesses, particularly amid the city’s recent wave of outbreaks, which led to a partial lockdown and closure of non-essential businesses. 

A sector representative from the Industry and Commerce Federation of Macau Central and Southern District has raised the fact that two-thirds of local SMEs are considering ceasing operation because of the pressures they face.

These firms must also face the pressure of landlords refusing to reduce rents despite restricted business operations.

The value of unpaid loans of small firms as of June reached MOP690.7 million (US$85.4 million), according a statement from the Monetary Authority of Macao.

SMEs defaulting in respect of loan repayment in the first six months of this year increased by 32% compared to the previous semester.

Meanwhile, the collateralised ratio, which indicates the proportion of credit secured by tangible assets, was 68.7%, down 2.8 percentage points from the last survey period, or down 10.2 percentage points when compared with the same period of 2021.

As at end-June 2022, the outstanding balance of SME loans decreased 9.5% from end-2021, or 10.6% from a year earlier to MOP84.5 billion. 

Compared to the previous survey period, outstanding SME loans in the sectors of “transport, warehouse and communications” rose 5.0% whereas those in “wholesale and retail trade” and “construction and public works” dropped 23.1% and 6.9% respectively.

The utilisation rate, defined as the proportion of outstanding credit balance to the credit granted, fell 3.7 percentage points from six months ago, or 4.5 percentage points from a year earlier, to 77.9%.  LV