Press Release 2009

Enhancement measures for Special Loan Guarantee Scheme and SME Export Marketing Fund to launch on Monday
Friday, June 12, 2009

The Trade and Industry Department (TID) will implement the enhancement measures for the Special Loan Guarantee Scheme (SpGS) and the SME Export Marketing Fund (EMF) next Monday (June 15) following approval by the Finance Committee of the Legislative Council.

The Financial Secretary on May 26 announced a package of relief measures to assist different sectors of the community to ride out the global financial crisis, including a series of enhancement measures to the SpGS and EMF.

The enhancement measures have the full support of the Small and Medium Enterprises Committee.

Special Loan Guarantee Scheme

Under the enhanced SpGS, the Government will increase its guarantee ratio for loans granted by the participating lending institutions (PLIs) from 70% to 80%. The maximum amount of loan that each enterprise may obtain will be doubled from $6 million to $12 million, within which the amount that can be used for revolving credit facilities is also doubled from $3 million to $6 million.

The maximum guarantee period for each loan is extended from three years to five years, or up to December 31, 2014, whichever is earlier. A grace period of six months will continue to be allowed, during which the borrower may repay interest only.

"With the Government assuming a larger share of default risk, we expect the PLIs to be more forthcoming in granting credit facilities, especially for marginal cases," a TID spokesman said.

All applications under the SpGS should be submitted through the PLIs. As at today (June 12), 23 PLIs have completed the legal procedures with the Government and are ready to accept applications under the enhanced SpGS. A list of the PLIs can be found on TID's website www.smefund.tid.gov.hk.

"We expect the number of PLIs ready to take on the enhancement measures will increase in the coming weeks when more of them have completed the legal procedures," the spokesman said.

The SpGS was introduced on December 15, 2008, for six months. It aims at helping Hong Kong enterprises tide over the liquidity problem during the global financial crisis. The application period has been extended until December 31, 2009.

All companies registered and with substantive business in Hong Kong (except listed companies) and have been in operation for more than one year as at December 15, 2008 are eligible to apply, irrespective of industry or size of business. 

As at yesterday (June 11), nearly 9,900 applications had been approved under the SpGS, involving a total loan amount of $18.7 billion.

SME Export Marketing Fund

The Government has just injected $1 billion into the EMF to continue its operation. To provide greater flexibility to SMEs, the scope of reimbursable items under the EMF has been expanded to include advertisements placed on eligible trade websites.

The list of eligible websites will be updated from time to time on TID's website www.smefund.tid.gov.hk.

The EMF aims at helping SMEs expand their export markets through participating in export promotion activities such as exhibition and business mission.

As of yesterday, more than 74,900 applications have been approved under the EMF, involving a total grant of $1.2 billion.

Applications for grants under the EMF should be submitted to TID direct. Application forms and guidelines for application can be obtained at TID or downloaded from the above website. 

For enquiries, please call 2398 5125.

Ends