Hong Kong SMEs get government “pain killers”

Small and medium enterprises can expect a helping hand from the government to ride out the rough times ahead.

The government is supporting SMEs with an HK$100 billion fund—but only if they avail of the special measures within the next nine months.

Secretary for Commerce & Economic Development Gregory So has proposed launching “special time-limited concessionary measures” for SMEs within the first half of this year. He said these measures, under the existing SME Financing Guarantee Scheme administered by the Mortgage Corporation, intend to further assist enterprises in tackling economic uncertainties and possible liquidity problems.

"We hope to seek funding approval from the Legislative Council in April, with a view to introducing the measures within the first half of this year," So said.

Under the proposed measures, the loan guarantee ratio will rise from the existing ceiling of 70% to 80% while the guarantee fee will be reduced.

Lending institutions can get an 80% loan guarantee by paying 30% of the existing guarantee fee for a 70% guarantee for approved loans.

The application period will last nine months and the government will make a total guarantee commitment of $100 billion. The maximum loan guarantee period is five years. Estimated government expenditure will be $11 billion, taking into account the anticipated default

Financial Secretary John Tsang said the SME Financing Guarantee Scheme and other measures will help ease the pain faced by small and medium enterprises.

Besides providing support to enterprises and preserving jobs, Tsang said he has kept in focus the needs of the working class.