HSBC creates $5 billion fund for businesses

LONDON Dec 7 (Reuters) - HSBC Holdings (HSBA.L) has created a $5 billion global working capital fund for small and medium-sized businesses to help them weather the credit crisis, the bank said on Sunday.

One billion pounds ($1.47 billion) of the fund has been earmarked for customers in the United Kingdom, HSBC, Europe's biggest bank, added in a statement. Businesses in Hong Kong would also be targeted in the first phase of operations.

The effects of the credit crisis mean that many businesses are finding funding hard to come by and relatively expensive despite cuts by central banks in benchmark lending rates.

"I am pleased that HSBC is using its financial strength to help our small business customers around the world by delivering this new $5 billion fund," HSBC Group CEO Michael Geoghegan said in a statement.

"SMEs (small and medium-sized businesses) are the lifeblood of most economies and it is their success that will create economic growth."

The HSBC statement also quoted British Finance Minister Alistair Darling as saying "This is a very welcome step to help small businesses in the UK."

The fund will be allocated on a case-by-case basis using HSBC's normal lending criteria, the bank said. The fund is new money above what HSBC would normally expect to lend in the current business environment and will be funded from the bank's own resources, it added. ($1=.6816 Pounds)