Credit limit extended to new small and medium-sized enterprises (SMEs) shrank by over a quarter during the second half of last year, as banks adjusted to the onset of a technical recession in the city.
In the second half of 2019, the credit limit for new SMEs dropped 26.8% from the same period a year earlier, and 41.1% from the first half of 2019, according to the Monetary Authority of Macao.
That came as the city officially entered into recession in the second quarter, posting its second consecutive quarter of negative growth.
Also at the end of last year, the outstanding balance of total SME loans decreased by 0.5% from the end of June 2019, but rose by 4.2% from a year earlier to 94.5 billion patacas (about $11.8 billion). By the end of the year, the outstanding balance of delinquent SME loans dropped by 11.1% from six months ago or 7.9% from a year earlier to 424.8 million patacas.
As much as 90% of Macau’s businesses are classified as SMEs. According to data provided last month by the Statistics and Census Service, more than 2,800 new companies were incorporated during the second half of last year and just 5% of them were registered with capital of 1 million patacas or more.
The data release comes as the government prepares a raft of economic policies designed to reduce the impact of the coronavirus-induced economic shutdown of the past month. Tax breaks and interest-free loans for SMEs are among the measures expected to be rolled out soon.
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