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A
Report on Support Measures for Small and Medium Enterprises
Report
Highlights
The Small and Medium
Enterprises Committee (the Committee) was tasked by the Chief Executive
to explore practical measures to further support the development of small
and medium enterprises (SMEs)* under the themes of helping
to start, build and expand a business. Following extensive research, discussions
and consultations in the past six months, the Committee has submitted
a report with a series of recommended support measures to the Chief Executive
on 27 June this year. The major recommendations in the Report are set
out below.
Setting
up Four Funding Schemes
The Committee recommends
setting up the following four funding schemes to support SMEs:
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SME
Business Installations and Equipment Loan Guarantee Scheme
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SME
Development
Fund
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SME
Training Fund
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SME
Export Marketing Fund
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Total
|
|
Capital
Amount
|
$500
million
|
$200
million
|
employees:
$300 million
entrepreneurs: $100 million
|
$200
million
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$1.3
billion
|
|
Minimum
No. of SMEs likely to benefit
|
6
600 SMEs
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20
000 SMEs
|
employees:
30 000 SMEs
entrepreneurs: 20
000 SMEs
|
20
000 SMEs
|
96
600 SMEs
|
Details of the funding
schemes are as follows:
|
SME
Business Installations and Equipment Loan Guarantee Scheme
|
|
Objective
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Through
the provision of Government guarantee, the fund aims to help SMEs
secure loans from banks and financial institutions to acquire the
necessary business installations and equipment for enhancing productivity
and competitiveness.
|
|
Target
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SMEs
incorporated in Hong Kong, excluding lending institutions and their
related firms.
|
|
Scope
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The
loans should be for acquiring installations and equipment relating
to the applicants' business operations, which could include machinery,
computer software and hardware, communication system, stationery,
transport vehicles and furniture and fixtures (such as air-conditioning
system, built-in cabinets and lighting system). The installations
and equipment may be located outside Hong Kong.
|
|
Amount of guarantee
|
The
maximum amount of guarantee offered to each SME is 50% of the approved
loan or $500,000 (whichever is the less). The maximum guarantee
period is three years. The loan is to be repaid by installments.
|
|
SME
Development Fund
|
|
Objective
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To provide financial
support to projects which will enhance the competitiveness of SMEs
in general or SMEs in specific sectors.
|
|
Target
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Non-profit-making
SME support organizations, trade and industrial organizations, professional
bodies and research institutes.
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|
Scope
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To subsidise
projects proposed and carried out by the above-mentioned organizations
to enhance the competitiveness of SMEs.
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|
Amount of subsidy
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The maximum
amount of grant for each project is $2 million. Applicants are required
to contribute part of the expenses of their projects, but this requirement
may be waived under special circumstances.
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|
SME
Training Fund
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Objective
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To encourage
SME employers to pursue self-enhancement, and to provide employees
with training related to the operation of their businesses.
|
|
Target
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SMEs incorporated
in Hong Kong.
|
|
Scope
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To subsidise
training activities for employers and salaried employees of SMEs,
which are relevant to their business operation.
|
|
Amount of subsidy
|
Employees:
For each successful application, the subsidy will cover 50% of the
training expenses incurred. The maximum amount of subsidy, on a
cumulative basis, for each SME is $10,000.
Employers:
For each successful application, the subsidy will cover 50% of the
training expenses incurred. The maximum amount of subsidy, on a
cumulative basis, for each SME is $5,000.
|
|
SME
Export Marketing Fund
|
|
Objective
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To encourage
SMEs to participate in export marketing activities to expand access
to markets outside Hong Kong.
|
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Target
|
SMEs incorporated
in Hong Kong.
|
|
Scope
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To subsidise
SMEs' participation in export promotion activities held locally
or outside Hong Kong (including trade fairs and study missions).
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|
Amount of subsidy
|
For each successful
application, the subsidy will cover 50% of the fundable items of
the approved export promotion activities, or $10,000 (whichever
is the less). Each SME can only receive subsidy once under the Scheme.
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The Committee's other
major recommendations concerning the six major areas, viz. business environment,
financing, corporate governance and culture, human resources, technology
application, and market expansion are set out below:
(A) Business environment
- When formulating
and implementing policies, policy bureaux/departments should take into
account the impact of their policies on SMEs.
- Government should
enhance co-operation with all local trade associations, in particular
those representing SMEs, in promoting the development of SMEs.
- Government should
avoid, as far as possible, levying sales tax.
- The Trade and Industry
Department (TID) should study the feasibility of providing one-stop
licensing services for starting business.
- The TID should
expand the SME Information Centre to provide more comprehensive information
and advisory services for SMEs.
- The TID should
enhance the information and types of services provided by the Virtual
SME Information Centre.
(B) Financing
- A roundtable should
be set up to enhance communication among SMEs, financial institutions,
the Hong Kong Monetary Authority (HKMA) and Government departments responsible
for commerce and industry.
- The HKMA should
expedite the establishment of a commercial credit reference agency.
- The services of
the Hong Kong Export Credit Insurance Corporation should be strengthened.
This includes modifying the Corporation's insurance risk assessment
process by providing different percentages of indemnity according to
the levels of risk involved, and providing additional diversified credit
insurance products.
- The trade should
study the feasibility of credit guarantee in the form of insurance,
with a view to strengthening SMEs' financing capability.
- The trade should
establish an SME financial resources database to help SMEs identify
suitable financial institutions and financing packages according to
their own needs.
- Government should,
in collaboration with other support organizations, organise educational
activities to motivate SMEs to enhance their financial transparency
and to acquire better knowledge of and skills in financial management.
(C) Corporate governance
and culture
- Government should,
in collaboration with professional organizations, draw up a set of guidelines
on corporate governance for SMEs.
- Trade associations,
in collaboration with support organizations, should formulate suitable
sector-specific governance framework for SMEs' reference.
- Government should,
working through its connection with both SMEs and big enterprises, promote
the benefit of reciprocal strategic partnership between the two parties.
(D) Human resources
- An SME Outstanding
Training Award should be established to commend SMEs with outstanding
performance in training.
- If evaluation confirms
the effectiveness of the Pilot Mentorship Programme, the TID should
expand it to benefit more SMEs.
- Tertiary institutions
should be encouraged to implement an Institution Trainee Practicum Programme.
(E) Technology application
- Government should
provide financial support to encourage the IT sector to form IT promotion
teams to assist and encourage the use of IT in different sectors.
- Government should
co-operate with relevant organizations and business associations in
organising sector-specific SME IT-expo to demonstrate how IT may work
in different sectors.
- The IT sector should
be encouraged to set up a database of IT service providers.
- An SME IT Application
Award should be set up to commend SMEs with outstanding achievements
in IT application.
(F) Market expansion
- The Hong Kong Trade
Development Council (TDC) should strengthen its matching database and
enhance its matching service to facilitate the formation of strategic
partnership between local SMEs and overseas companies.
- The Skills Upgrading
Steering Committee should consider including relevant service industries
in the Skills Upgrading Scheme so as to enhance the competitiveness
of local service industries.
- Government should
hold talks to brief SMEs on its procurement and tender procedures.
- The TDC should
implement as soon as possible various measures to facilitate SMEs' entry
into the Mainland market.
- Government should
consider, having regard to the experience of the visit to the Western
Region of China, what action could be taken to help SMEs seize the opportunities
available in the Mainland.
Small and Medium Enterprises
Committee
June 2001
* SMEs
are defined as manufacturing firms with fewer than 100 employees or non-manufacturing
firms with fewer than 50 employees in Hong Kong
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