Hong Kong SMEs companies face serious credit issues

According to statistics, city’s businesses see huge overdue payment cases in the past. Hong Kong enterprises have been exposed to greater credit risks and recorded the highest overdue payment rate against their turnover, which may be worse than their mainland and Taiwan counterparts. A report released that about 69 percent of Hong Kong enterprises had overdue accounts last year. Although the percentage is lower than the mainland businesses’ 79 percent and Taiwan peers’ 74 percent, Hong Kong enterprises’ credit control problems are more intense. Among those Hong Kong enterprises which had overdue payment over the past six months, 34 percent said overdue payment accounted for more than 2 percent of their turnover. This ratio is “a very serious signal” when compared with Taiwan companies’ 13 percent and mainland counterparts’ 31 percent. While about 17 percent of Hong Kong enterprises with overdue accounts said their average overdue time is more than 90 days, the same situation was faced by 12 percent mainland enterprises and 11 percent Taiwan businesses. The prospect for exports to Europe is still not positive this year, but the prospect for exports to the mainland is likely to be in a better situation, and that to the rest of Asia will also be stable. SMEs are trapped in financial difficulties, which have drawn wide attention from local government and banks. HK government and Guangdong province government have offered privilege policies to SMEs and banks agreed to offer small loans to those SMEs at a low interest rate. IBUonline is a B2B platform, which has helped many SMEs to seek orders from overseas buyers.