BOCHK-backed virtual lender Livi eyes further SME business growth after strong 2023

Livi Bank, a virtual bank backed by the Bank of China (Hong Kong), will continue to expand lending to small and medium-sized enterprises (SMEs) as it views the segment as a future growth engine after strong growth this year, according to CEO David Sun.

"There is strong demand from SMEs for banking services and lending," Sun said in a media briefing recently. "This will be the focus of expansion at Livi Bank in coming years."

Livi, which is among eight virtual lenders that started operations in Hong Kong in 2020, started offering corporate banking services in March with a focus on SMEs.

Do you have questions about the biggest topics and trends from around the world? Get the answers with SCMP Knowledge, our new platform of curated content with explainers, FAQs, analyses and infographics brought to you by our award-winning team.

"This newly launched service is a major growth segment, as we progress the growth of our business," Sun said. "Going forward, Livi Bank will see accelerating growth led primarily by corporate banking businesses.

"We will continue to make substantial investments in new products and segments."

Livi joins Ping An OneConnect Bank - a virtual lender indirectly owned by mainland Chinese insurer Ping An Insurance - in increasing lending to SMEs, helping the city's small players capture growth opportunities in the post-Covid-19 era.

From left, David Sun, CEO, Jammy Chen, consultant, Gary Lam, chief technology officer, and Weiwei Wang, head of the Greater Bay Area and digital platform, of Livi Bank. Photo: Handout alt=From left, David Sun, CEO, Jammy Chen, consultant, Gary Lam, chief technology officer, and Weiwei Wang, head of the Greater Bay Area and digital platform, of Livi Bank. Photo: Handout>

In the first nine months of this year, Hong Kong received more than 23 million visitors, including 18.7 million from the mainland, according to the Hong Kong Tourism Board. The previous year, it was visited by only 604,564 people.

This jump in tourism following the reopening of the border with the mainland in January is creating new opportunities for SMEs in sectors such as trading, e-commerce and retail, Sun said.

There were 340,000 SMEs in Hong Kong at the end of last year, employing 45 per cent of the city's private workforce.

The pandemic has forced the public to use more digital banking services, with many bank branches closing during the outbreak, a factor that has helped customers be more accepting of digital banking, Sun said.

Moreover, the bank had introduced new technology that allows SMEs to open business accounts in just two days, instead of the weeks or even months that traditional lenders might take to open such accounts, said Jammy Chen, a veteran of SME banking services and consultant at Livi.

"Livi is offering a simple and easy way for SMEs to open an account," Chen said. "Our SME banking services have continued to experience steady growth since the launch in March.

"We will continue to expand further on SME lending in future by leveraging our strong network of shareholders and business partners."

The bank, however, recognises the need to be selective when it comes to lending to SMEs, particularly restaurant operators.

"Some restaurants face keen competition, as many Hong Kong people like to go north for their weekends, in Shenzhen or other Greater Bay Area cities," Chen said. "We have to send people pretending to be customers to check on their businesses before offering them a loan."

SMEs in the trade and cross-border e-commerce sectors, on the other hand, are reporting good growth after the border reopening, and some would like to take out bank loans to support their development further.

Cross-border e-commerce is thriving, with Hong Kong being a key market, and Livi will continue supporting SMEs in this area, said Weiwei Wang, the head of Greater Bay Area and digital platform at the virtual lender.

This article originally appeared in the South China Morning Post (SCMP), the most authoritative voice reporting on China and Asia for more than a century. For more SCMP stories, please explore the SCMP app or visit the SCMP's Facebook and Twitter pages. Copyright © 2023 South China Morning Post Publishers Ltd. All rights reserved.

Copyright (c) 2023. South China Morning Post Publishers Ltd. All rights reserved.