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The Hong Kong Monetary Authority (HKMA) has launched Project CargoX, an initiative that aims to use digitalised cargo data to streamline bank processes and help SMEs access trade finance.

The authority announced this week it has convened an expert panel of banks, cargo data providers, credit reference agencies and government bodies to produce a roadmap for the project by the end of this year.

HKMA deputy chief executive Howard Lee said at the panel’s inaugural meeting on April 28 that SME access to trade finance “has long been hindered by different processing pain points”.

“For instance, the heavy reliance on paper-based documents has led to inefficiencies and difficulty in tracking and verifying the transactions,” he said.

“With light balance sheets, many SMEs also struggle to provide the collateral required by banks to secure loans. Furthermore, issues like duplicate financing have heightened the risk of default and fraud.”

Lee added that international trade relies on an “intricate flow” of goods, funds and documents, including invoices, bills of lading, letters of credit, insurance certificates and customs declarations.

“To navigate this complexity, it is crucial to leverage industry expertise to gain a holistic understanding of the trade finance landscape, pinpoint areas for improvement, and identify processes for further digitalisation, particularly through cargo data,” he said.

Bank participants include the local branches of Bank of China and Standard Chartered, as well as Hang Seng Bank and its parent company HSBC, and Shanghai Commercial Bank.

The Greater China arm of Coface, Dun & Bradstreet and the Hong Kong Export Credit Insurance Corporation also join, as well as logistics and freight information providers including FreightAmigo and Fung Group.

Other participants include the International Chamber of Commerce Digital Standards Initiative and several public bodies.

“In today’s complex global trade landscape, many businesses, in particular SME traders, need more digitalised and efficient trade finance solutions to transform their business models and supply chains,” says HKMA chief executive Eddie Yue.

“By uniting a diverse group of experts from public and private sectors, the expert panel will play a pivotal role in driving the advancement of our digital trade finance ecosystem, reinforcing Hong Kong’s position as a premier trade finance hub and fostering the growth of SMEs.”

The project builds on Hong Kong’s Commercial Digital Interchange (CDI) infrastructure, which was launched in 2022 as a data clearing house that facilitates the transfer of data from consenting companies and third parties to financial institutions.

A major focus of the CDI is increasing smaller companies’ access to finance by making it easier for them to share commercial data with potential lenders. However, cargo data is not yet available on the platform, in part due to its complexity, said Lee.

The authority also intends to conduct proof-of-concept studies with logistics providers and banks in Hong Kong throughout 2025 and 2026.

Project CargoX is expected to run alongside Hong Kong’s Port Community System, which is currently under development.

A government document from March says the Port Community System will establish a central data exchange platform, allowing for real-time cargo tracking for goods transported over land, air and sea.

It will also offer “value-added electronic services” in the form of modular add-ons, such as the ability to extract cargo data automatically to fill in customs declarations.

The government announced funding for the programme of over HK$201mn in its 2025-2026 budget, and its transport and logistics bureau expect the system to be up and running by the end of the year.