The volume of credit granted by Macau banks to small and medium-sized enterprises (SMEs) recovered last year, but with the default rate increasing, official data indicate.
The Monetary Authority of Macau (AMCM) indicated in a report that the new credit limit approved for SMEs totaled 9.5 billion patacas (1.01 billion euros) in 2025, representing an increase of 22% compared to 2024.
Approvals soared in the first half before slowing in the second, while the collateralization rate fell sharply “due to greater reliance on credit-based guarantees.”
“In the following period, the rate fell further to 25.7% with an increased number of loans approved with credit guarantees,” the report notes.
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Business expansion remained the main purpose of new loans, accounting for 64.2%, followed by new projects with 22%. At the end of December 2025, loans to SMEs totaled 67.3 billion patacas (7.16 billion euros), down 13.9% from the previous year.
Construction absorbed the largest share, 28.7 billion patacas (3.05 billion euros), followed by wholesale and retail trade with 9.3 billion patacas (990 million euros) and hotels and restaurants with 4.6 billion patacas (490 million euros).
However, loan quality indicators deteriorated in 2025, AMCM warned, with overdue loans falling slightly to 5.3 billion patacas (564 million euros), but the default rate rising to 7.9%.
“At the end of 2025, loans overdue for three to six months, six to 12 months, and more than 12 months totaled 177.9 million (about 19 million euros), 1.4 billion (about 149 million euros), and 3.7 billion patacas (about 394 million euros), respectively,” the report states, noting that more than 70% of overdue loans had been in arrears for more than a year.
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Banks pointed to weak credibility and unsatisfactory performance as the main reasons for rejecting SME credit applications in the second half of 2025.
According to the survey, “weak credibility” of SMEs topped the list of reasons for refusing loans, with “unsatisfactory performance” in second place.
