Press Releases

SME Committee welcomes CE's decision to accept its recommendations on means to further enhance the effectiveness of the SME funding schemes
Saturday, December 14, 2002

The following is issued on behalf of the Small and Medium Enterprises Committee:

The Small and Medium Enterprises Committee (SMEC) welcomed the Chief Executive's (CE) decision today (December 14) to accept all the recommendations of the SMEC on means to further enhance the effectiveness of the four funding schemes. The recommendations are contained in the SMEC's review report on the four SME funding schemes.

The four funding schemes are, namely the SME Business Installations and Equipment Loan Guarantee Scheme (BIG), SME Export Marketing Fund (EMF), SME Training Fund (STF), and SME Development Fund (SDF).

The Chairman of the SMEC, Mr Chan Wing-kee, said : "The SMEC started a comprehensive review of the schemes in August 2002. The review was recently completed, and the SMEC submitted the review report to the CE earlier on. The Committee is of the view that the schemes are of practical use to SMEs, and are effective in helping SMEs equip themselves for new challenges and opportunities.

"At the same time, the Committee considers that by suitably raising the ceilings of the guarantee/grant for individual SMEs, broadening the scope of individual schemes, and rationalising the application procedures, the scheme would more comprehensively address the needs of SMEs and benefit more SMEs. It has therefore proposed a series of recommendations with a view to further enhancing the effectiveness of the schemes," Mr. Chan said.

"The Committee is pleased that the CE has accepted all he recommendations. In the coming few months, we will continue to work closely with the Government to work out the implementation details, with a view to implementing the improvement measures as early as possible," Mr Chan added.

In the review report, the SMEC has come up with the following major recommendations:

* extend Government's guarantee to cover working capital loan, in addition to business installations and equipment loan;

* increase the maximum amount of Government's loan guarantee an SME may receive from the existing $1 million to $4 million ($2 million for business installations and equipment loan guarantee, and $1 million each for equipment-related working capital loan guarantee and accounts receivable loan guarantee);

* extend the guarantee period for each business installations and equipment loan from three years to five years;

* increase the maximum amount of grant an SME may receive under the EMF from $10,000 to $40,000;

* increase the maximum amount of grant an SME may receive under STF from $15,000 to $30,000; and

* allow SMEs to submit applications for STF either before or after the commencement of the training courses.

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