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The Government today (November 10) put forward two further support measures to help small and medium-sized enterprises (SMEs) tide over their difficulties amid the current financial crisis.
They are in addition to the enhancement measures to the SME Loan Guarantee Scheme (SGS) launched on November 6 and the series of measures taken by the Hong Kong Export Credit Insurance Corporation (ECIC) last month to strengthen support for SMEs.
Elaborating on the support measures, a Government spokesman said one of them involves the setting up of a time-limited Special SME Loan Guarantee Scheme to provide $10 billion in liquidity to the commercial lending markets for SMEs.
：The Government will provide a 70% guarantee to the loans granted by the participating lending institutions (PLIs) and its guarantee commitment will be $7 billion.
：Under the scheme, the maximum amount of loan that each SME may obtain from a PLI is $1 million.
：Within the maximum amount of $1 million credit facility for each SME, up to $500,000 can be used as revolving credit. The Government・s guarantee ceiling to this revolving credit facility will also be 70%,； the spokesman said.
He added that a six-month repayment grace period will be provided to borrowers, during which they may pay back the interest only. Thereafter, the loan should be repaid over a maximum of 24 months.
The spokesman said the proposed scheme aims to further facilitate SMEs in obtaining immediate cash flow relief from the commercial lending market in the face of the current credit crunch.
：All registered SMEs with substantive business in Hong Kong, regardless of their industry or business types, are eligible to apply. Application is open for six months starting from the date of implementation, which may be extended subject to review,； he said.
The Administration will consult the Panel on Commerce and Industry of the Legislative Council (Legco) and seek the approval of the Finance Committee at the earliest opportunity. Subject to the completion of the necessary procedures and legal documentation, the proposed scheme is expected to come into operation next month.
At the same time, the ECIC will launch a series of enhanced measures to further assist SMEs to sustain their business and develop new markets during the current financial turmoil, subject to a review in two years.
To offer better protection for exporters and assist them to acquire funding from banks, the ECIC has agreed to be as accommodative and flexible as possible in handling SMEs・ requests for export credit insurance and increase the cover within the bounds of prudent credit assessment and risk management.
It will also provide more country cover for six emerging markets, namely the United Arab Emirates, Kuwait, Chile, Brazil, the Czech Republic and Malaysia. The premium rates for these markets will also be lowered.
For applications for small credit limit of $0.5 million or below, the ECIC will shorten the processing time to two to three days upon receipt of adequate information, and will be as accommodative as possible in processing them.
To strengthen the ECIC・s underwriting capacity, the Government will increase the Statutory Maximum Liability (SML) from $15 billion to $30 billion.
Under the ECIC Ordinance, the increase in SML requires a positive resolution by the Legco. It is planned that the resolution will be introduced to the Legco early next year.
：The SME sector is a pillar of Hong Kong・s economy and the Government is highly concerned about the difficulties it faces during the present liquidity crunch.
：We hope that these additional measures will help provide SMEs with more flexibility and convenience in obtaining the necessary capital to maintain their operations and develop new markets,； the spokesman said.
Ends/Monday, November 10, 2008
Issued at HKT 18:08
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