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Three SME funding schemes will be launched on December 14
Wednesday, December 12, 2001

Three funding schemes for small and medium enterprises (SMEs) will start receiving applications on December 14 (Friday). They are, namely the SME Business Installations and Equipment Loan Guarantee Scheme, the SME Export Marketing Fund and the SME Development Fund. A fourth funding scheme, the SME Training Fund, will start receiving applications in mid-January 2002.

At a press conference today (December 12) announcing the launching of the three funding schemes, Mr. Joshua Law, Director-General of Trade and Industry, said, "The Loan Guarantee Scheme and the Export Marketing Fund will accept applications all year round, whereas the Development Fund will invite applications two times a year."

"The deadline for the first tranche of applications for the Development Fund is February 18, 2002. The second tranche of applications will be invited around June/July 2002. The exact date will be announced later," he said.

SMEs that wish to seek Government guarantee under the Loan Guarantee Scheme shall apply through lending institutions. A list of participating lending institutions is available at the Trade and Industry Department and the homepage of the SME Funding Schemes.

SMEs that wish to apply for the Export Marketing Fund, and trade and industry organizations, industry support organizations, professional bodies and research institutes that wish to apply for the Development Fund shall forward applications to the Trade and Industry Department direct.

"The application procedures are simple and easy. Also, applicants do not have to wait long before knowing the outcomes of their applications," Mr. Law added.

The Trade and Industry Department, which administers these funding schemes, will inform a lending institution on whether its client SME's application for Government guarantee is approved within three working days upon receipt of the application. Applicants for the Export Marketing Fund will be informed of the outcome of their applications within seven working days from the date of submitting applications. Applicants for the Development Fund will be informed of the outcome no longer than two months after the deadline for applications.

The Chairman of the SME Committee, Mr. Chan Wing-kee, welcomed the launching of the three SME funding schemes. "SMEs have to enhance their competitiveness in the light of globalisation, China's accession to the World Trade Organization, and the emergence of a knowledge-based economy. SMEs which wish to secure loans from lending institutions to procure business installations and equipment, provide training to their employers and employees, participate in export promotional activities, or enhance their general competitiveness will find these funding schemes useful." He urged SMEs to make good use of these funding schemes to equip themselves for the challenges ahead.

The Loan Guarantee Scheme helps SMEs secure loans from participating lending institutions to acquire first or second-hand business installations and equipment, through Government acting as the guarantor. The maximum Government's guarantee for each SME is $1 million, or 50% of the approved loan, whichever is less. The maximum guarantee period is three years. Under the Scheme, the Government will provide guarantees up to a total of $6.6 billion, therefore helping SMEs secure loans amounting to $13.2 billion from lending institutions.

The Export Marketing Fund helps SMEs expand overseas market by subsidising their participation in export promotion activities held in Hong Kong or elsewhere. The maximum grant offered to a successful applicant is $10,000, or 50% of the expenditures incurred from participating in the export promotional activities, whichever is less.

The Development Fund finances projects proposed by support organizations, trade and industrial organizations, professional bodies and research institutes with a view to enhancing the competitiveness of SMEs in Hong Kong in general, or SMEs in specific sectors. The maximum funding support for each approved project is $2 million, or 90% of the total project expenditure, whichever is less.

Apart from inviting projects initiated by these organizations and institutes, the Trade and Industry Department is soliciting the following projects for the first tranche of applications:

  • setting up information technology promotion teams to enhance SMEs' awareness on the importance of IT;
  • organising an SME IT-expo;
  • establishing database on services and products offered by lending institutions to SMEs, with a view to helping SMEs identifying appropriate lending institutions and financial packages; and
  • drawing up a set of guidelines on corporate governance for SMEs.

A vetting committee will be formed to assess applications for the Development Fund. The Committee will be chaired by the Director-General of Trade and Industry, and will comprise SME Committee members, plus representatives from the manufacturing and service sectors, academics and professionals. The vetting committee will be set up in January 2002.

Fourteen industry support organizations and trade and industrial organizations have agreed to help promote the funding schemes. So far, 41 banks and financial institutions have agreed to participate in the Loan Guarantee Scheme.

Information leaflets, application forms and guidelines are available at the Trade and Industry Department (Trade and Industry Department Tower, 700 Nathan Road, Mong Kok, Kowloon), District Offices and major SME support organizations. They can also be downloaded at the homepage of the SME Funding Schemes at www.smefund.tid.gov.hk. The enquiry hotline is 2398 5125.

In his Policy Address in October this year, the Chief Executive announced his decision to accept all the 30 or so recommendations which the SME Committee had put forward to him for consideration in June, and to inject a total amount of $1.9 billion to set up the four SME funding schemes. The Finance Committee of the Legislative Council approved the funding in November. The establishment of the four funding schemes will result in a total Government commitment of $7.5 billion, with an expected maximum expenditure of $1.9 billion.