[HONG KONG, February 5, 2024] Micro Connect, which connects global capital with micro and small businesses, announced the signing of a syndicated asset-backed loan facility of up to US$ 200 million*, with initial credit support of US$ 50 million from HSBC.
Following a US$25 million asset-backed loan facility from HSBC in December 2022, the new loan facility is a validation of Daily Revenue Obligation (DRO) as an underlying asset, as Micro Connect continues to expand the DRO-based investment and financing market for micro and small businesses. The use of asset-backed facilities will help Micro Connect develop a vibrant ecosystem with broad participation from a diverse set of professional investors, micro and small businesses, and market intermediaries.
Charles Li, Founder and Chairman of Micro Connect, said, “We are delighted to continue our collaboration with HSBC as a long-term financing partner. This new facility is crucial for expanding our business model in China and beyond, as well as helping us transform into a fully disinterested operator of MCEX. We appreciate HSBC’s confidence in Micro Connect’s commitment to delivering innovative and accessible solutions to empower the underserved sectors of the economy.”
There are over 170 million micro, small and medium enterprises (MSMEs) and self-employed individuals in China, which together make up 60% of the nation’s GDP and 80% of job creation^. Yet traditional products including both debt and equity are not able to meet the unique needs of micro and small businesses. The facility, a bespoke asset-backed financing solution extended from the HSBC New Economy Fund, will enable Micro Connect to grow its innovative revenue-sharing asset class to give businesses more sustainable and affordable access to financing. HSBC has acted as the sole structuring bank, senior tranche lender, facility and security agent, providing a flexible and scalable financing solution to support Micro Connect’s expansions.
*Asset-backed loan facility provided to Micro Connect Leadership Investment VI Limited
^ As of Aug-2023. Source: http://dangjian.people.com.cn/n1/2023/1101/c117092-40107504.html
About Micro Connect
Micro Connect connects global capital with small businesses. Officially launched on August 3, 2023, Micro Connect Macao Financial Assets Exchange (MCEX) is a global exchange platform for the revenue-sharing asset class and represents Macao’s new endeavor to promote the development of innovative finance and Micro Connect’s mission to provide micro and small businesses with access to sustainable and affordable funding. As of the end of December 2023, more than 10,000 micro and small businesses had raised nearly RMB 4 billion from global investors through the platform.