HSBC has launched a US$290 million lending facility aimed at technology startups and other new industries in China’s Pearl River Delta region, intensifying the battle for a slice of a business that is growing despite a slowing economy.

    Showered with money from private investors over the last few years, the promising technology startups in China have shunned traditional lenders, seeking to instead raise funds directly from equity investors.

    But global banks no longer want to be left out, mainly after the success of the likes of Alibaba and Tencent that have seen their revenue doubling over the last couple of years, shrugging off a broader economic slowdown that has hurt earnings for sectors from manufacturers to miners.

    As a result, banks such as HSBC and Citigroup, as well as a host of Chinese lenders, are now courting the emerging Chinese firms by offering loans and other banking services.

    With the launch of its 2 billion yuan (US$290 million) “innovation fund” for small and medium-sized companies in the Guangdong, HSBC plans to target this promising segment and boost its client base.

    “The target customer will be those (that) are high-end, high-tech startups and enterprises ... those enterprises that are upgrading the use of technology and ability to innovate like for example using robotics to manufacture more efficiently,” said Montgomery Ho, HSBC’s chief executive for Guangdong.

    The new loan facility will allow HSBC to offer other banking services such as cash management, and hedging of interest rates and foreign exchange to these companies, he said, adding the selected companies would get preferential interest rates and service fee waivers as part of the new initiative.

    The lending facility also underlines HSBC’s commitment to the Pearl River Delta region that is at the heart of the bank’s strategy to grow in the country.

    (SD-Agencies)