New SME credit rebounds in late-2018

New credit approved for small and medium-sized enterprises (SME) rebounded in the second half of 2018 when compared to the first half of 2018, according to data released by the Monetary Authority of Macao. Also in the second half of 2018, the outstanding balance of SME loans registered growth and the share of SME loans to major industries remained stable.

In the period, new SME credit limits approved by Macau banks totaled MOP13.1 billion, up 23.7 percent from the first half of 2018 or 0.9 percent from the same period of 2017.

The collateralized ratio, which indicates the proportion of credit limit with tangible assets pledged, was 75.8 percent, down 1.6 percentage points when compared with the last survey period, but up 2.6 percentage points when compared with the same period of 2017.

At the end of December 2018, the outstanding balance of total SME loans increased 7.4 percent from end-June 2018, or 13.5 percent from a year earlier, to MOP87.9 billion.

Compared to the last survey period, SME loans to “construction and public works” and “wholesale and retail trade” increased at respective rates of 4.5 percent and 4.1 percent, whereas those to “information technology” and “manufacturing industries” dropped 5.6 percent and 1.8 percent respectively.

The utilization rate, defined as the proportion of outstanding credit balance to the credit limit granted, increased 2.9 percentage points from six months earlier, or 8.7 percentage points from a year earlier, to 80 percent.

At end-December 2018, the outstanding balance of delinquent SME loans dropped 21.8 percent from six months previously, or 12.4 percent from the preceding year, to MOP457.7 million.

The delinquency ratio, a ratio of delinquent loans’ outstanding balance to total SME loans outstanding, dropped 0.19 percentage points from end-June 2018 or 0.15 percentage points from end-2017 to 0.52 percent.