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In order to assist small and medium enterprises (SMEs) which have difficulties in obtaining adequate finance from lending institutions, the Government will launch a 2.5 billion Special Finance Scheme tomorrow (Monday) to provide guarantees for loans for SMEs.
The Scheme is part of the package of the special relief measures announced by the Government on June 22 to ease Hong Kong's economic adjustment.
Under the new Scheme, the Government will act as the guarantor for loans to SMEs approved by lending institutions. The maximum amount of the guarantee in each case is $2 million or 50 per cent of the approved loan, whichever is the less.
In addition, if the concerned institution is a licensed bank and it so requests the Government will provide a matching deposit in that bank so that the loan to deposit ratio of the bank will be maintained at a comfortable level after loans are extended to SMEs.
The Scheme would be market-driven. It would rely on the lending institutions to exercise their usual prudent professional judgement in assessing applicants' credit worthiness. The risk of default would be shared between the lending institutions and the Scheme.
All companies registered in Hong Kong are eligible to apply for the Scheme. The loans covered by the Scheme may be offered as term loans or in the form of a new credit lines and the guarantee period is up to a maximum of 365 days.
Other than those limitations on the use of the loans which may be imposed by the lending institutions, the Scheme will not impose limitations on the specific uses of the loans.
The lending institutions will determine the interest for the loans they offer to SMEs in accordance with their established principles and Government will not intervene in such commercial decisions.
All applications must be lodged through banks or deposit taking companies which have participated in the Scheme.
So far, 26 banks or deposit taking companies have signed the Deed to join the school. They are :-
* Banca Commerciale Italiana Societa
* Bangkok Bank Public Company Ltd.
* Bank of America (Asia) Ltd.
* The Bank of East Asia Ltd.
* Chiyu Banking Corporation Ltd.
* Citibank, N.A.
* CITIC Ka Wah Bank Ltd.
* Dah Sing Bank Ltd.
* The Hong Kong Chinese Bank, Ltd.
* Jian Sing Bank Ltd.
* The Kwangtung Provincial Bank
* Liu Chong Hing Bank Ltd.
* Sin Hua Bank Ltd.
* Union Bank of Hong Kong Ltd.
* Wing Lung Bank Ltd.
* Yien Yieh Commercial Bank Ltd.
* Allied Capital Resources Ltd.
* Dah Sing Finance Ltd.
* Delta Asia Credit Ltd.
* Dharmala International Finance Ltd.
* Edward Wong Credit Ltd.
* Ka Wah International Merchant Finance Ltd.
* Liu Chong Hing Finance Ltd.
* Orient First Capital Ltd.
* Sin Hua Finance Company Ltd.
* The Wing On Finance Company Ltd.
Separately, 14 leading institutions have clearly indicated their intention to take part. These institutions are :
* Bank of Communications
* Belgian Bank
* Chekiang First Bank Ltd.
* The China and South Sea Bank Ltd.
* First Pacific Bank Ltd.
* Hang Seng Bank Ltd.
* The Hong Kong and Shanghai Banking Corporation
* International Bank of Asia
* Nanyang Commercial Bank, Ltd.
* ORIX Asia Ltd.
* S.P.C. Credit Ltd.
* Avco Financial Services (Asia) Ltd.
* IBA Credit Ltd.
* Wayfoong Credit Ltd.
For enquires on the Scheme, please contact the Treasury on 2829 5727, the Industry Department on 2737 2497 or the participating lending institutions.
Leaflets explaining details of the Scheme can be obtained from District Offices, Industry Department, Trade Department, Hong Kong Export Credit Insurance Corporation, participating lending institutions and major industry and trade organisations.
End/Sunday, August 23, 1998
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