SME credit approvals rise 22% in 2025

[Photo: Renato Marques]

Macau banks increased lending to small and medium-sized enterprises (SMEs) in 2025, supported by a gradual economic recovery and easing interest rates, according to new data from the Monetary Authority of Macao (AMCM). However, the sector also saw a deterioration in loan quality, with delinquency levels reaching a multi-year high.

Total new SME credit approvals rose 22% year-on-year to MOP9.5 billion, the regulator said. AMCM attributed the increase to improving economic conditions and lower borrowing costs, which encouraged renewed lending activity.

Despite the rebound, the 2025 figure remained historically subdued, ranking as the second-lowest annual level since the statistics were first compiled in 2009, above only 2024.

Most new lending continued to support existing businesses, with 64.2% allocated to expansion activities. Financing for new projects increased to 22%, while working capital loans and funding for startups declined to 11.1% and 0.4%, respectively.

On the performance side, outstanding SME loans fell 13.9% to MOP67.3 billion by end-2025. Delinquent loans – defined as payments overdue by more than three months – edged down slightly to MOP5.29 billion.

However, because the total loan portfolio contracted more sharply than bad debts, the delinquency ratio rose to 7.9%, the highest year-end level since 2009.

Sector-wise, construction remained the dominant borrower, accounting for 42.6% of SME credit, followed by wholesale and retail at 13.8%, and hotels and restaurants at 6.8%.

The report also showed a continued preference for longer-term lending, with medium- and long-term loans making up 62.1% of SME credit facilities.