A Report on the Review of the SME Funding Schemes

5.1 Launched in mid December 2001, the SDF provides funding support to non-profit-distributing organisations, such as industrial support organisations, trade and industrial organisations, professional bodies or research institutes, to implement projects which are conducive to enhancing the competitiveness of SMEs in general or SMEs in specific sectors. The maximum amount of funding support for each approved project is $2 million or 90% of the total project expenditure (whichever is the less). The applicant will have to contribute the balance of the approved budget, which may be in cash, in kind, or in the form of third-party sponsorship. Applications are normally invited twice a year. Each organisation may submit up to four applications in each tranche.

5.2 As at end October 2002, the SDF has approved 39 applications received under the first tranche. The amount of funding support involved was about $44 million. In addition, the SDF Vetting Committee are revisiting a few applications which the applicants have revised, with a view to deciding whether funding support may be granted to them as well. The SDF is now inviting applications for the second tranche. Detailed statistics relating to the first tranche are at Annex 4 (pdf format).

5.3 Having taken into account the feedback of various parties so far, the Committee is of the view that the current arrangements of the SDF (including the maximum amount of funding support, assessment procedures, and vetting criteria) are appropriate and effective in achieving its objective. The Committee considers it not necessary to revise the scheme for the time being. The Committee will further review the scheme when processing for the second tranche of applications has been completed. The Committee considers that a thorough assessment on the effectiveness of the scheme is possible only when the funded projects from the first one or two tranches have been implemented.

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