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Trade and Industry Department The Government of the Hong Kong Special Administrative Region
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Press Release

Special Loan Guarantee Scheme extended to end 2010
Wednesday, April 21, 2010

The Government today (April 21) announced that the application period for the Special Loan Guarantee Scheme (SpGS) would be extended for another six months until December 31, 2010, for the last time. Other features of the scheme will remain unchanged.

"In recent months, the economic situation in Hong Kong has shown significant improvement and the problem of credit crunch has also been largely relieved. It should be an opportune time to let the credit market gradually resume its normal operation. Nevertheless, considering that the trade may need some lead time to consolidate their business during the early stage of recovery, the Government has decided to extend the SpGS for another six months until end of this year for the last time," a government spokesperson said.

The Trade and Industry Department (TID) will stop receiving new SpGS applications from the participating lending institutions (PLIs) with effect from January 1, 2011. The existing SME Loan Guarantee Scheme will continue to render assistance to SMEs to help them obtain loans from the PLIs.

So far, 46 PLIs have joined the SpGS. As at April 19, the TID has approved 30,668 applications, involving a total loan amount of over $74 billion. The scheme has benefitted over 17,000 enterprises in both manufacturing and non-manufacturing sectors; 95% of the beneficiaries are SMEs. The scheme has helped stabilise about 300,000 jobs, contributing positively to "supporting enterprises and preserving employment".

The Government had previously extended twice the application period for SpGS, which was scheduled to end on June 30, 2010. The Government will submit a paper to the Legislative Council's Commerce and Industry Panel concerning the last extension of the SpGS.

The SpGS was introduced on December 15, 2008. It is a time-limited initiative to tackle the credit crunch arising from the global financial crisis.

Under the SpGS, the Government provides a total loan guarantee commitment of $100 billion. With effect from June 15, 2009, the Government has provided an 80% guarantee for loans granted by the PLIs. The maximum loan amount for each enterprise is $12 million, of which up to $6 million can be used for revolving credit facilities.

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

Ends