************************************
Following is a written reply by the Secretary for Commerce and Economic Development, Mrs Rita Lau, to a question by Dr Hon Lam Tai-fai in the Legislative Council today (April 21):
Question:
Since December 15, 2008, the Trade and Industry Department (TID) has implemented the Special Loan Guarantee Scheme (the Scheme), which aims to help enterprises tide over their liquidity problems, and the application period of the Scheme will expire on June 30 this year. In this connection, will the Government inform this Council:
(a) of the number of applications received by TID and the amount of loans concerned approved by lending institutions each month since the implementation of the Scheme;
(b) whether it had, in the past 12 months, assessed the overall effectiveness of the Scheme; if it had, of the details; if not, the reasons for that;
(c) whether it had, in the past six months, assessed the pace of economic recovery in Hong Kong in the second half of this year and when the credit market will resume normal operation, so as to decide whether the application period of the Scheme should be extended; if it had, of the details;
(d) whether it had, in the past six months, assessed the impact of factors of global economic uncertainties on small and medium enterprises (SMEs) in Hong Kong in respect of its financing in the second half of this year; if it had, of the details; if not, the reasons for that;
(e) since the Government's announcement of the extension of the application period of the Scheme for the second time at the end of last year, whether the authorities have compiled statistics on the total number of views received which requested for the application period of the Scheme to be extended again; if they have, of the details; if not, the reasons for that;
(f) whether it will consider extending the application period of the Scheme to the end of this year; if it will, when it will announce the arrangement concerned; if not, of the reasons for that; and
(g) whether it had, in the past 12 months, assessed the impact of terminating the Scheme on SMEs in respect of their financing; if it had, of the details; if not, the reasons for that, and whether it will, upon the expiry of the Scheme, consider further enhancing the SME Loan Guarantee Scheme, including raising the maximum percentage of the Government's loan guarantee ratio as a guarantor of the approved loans, as well as increasing the maximum amount of loan guarantee for each SME?
Reply:
President,
The Government launched the Special Loan Guarantee Scheme (the Scheme) on December 15, 2008 with a total guarantee commitment of $100 billion. As at April 19, 2010, the Trade and Industry Department (TID) has received 33,273 applications, of which 30,668 have been approved involving a total loan amount of over $74 billion. The Scheme has benefited over 17,000 enterprises in both manufacturing and non-manufacturing sectors. Some 95% of the beneficiaries are SMEs. The Scheme has helped preserve jobs for about 300,000 employees.
The reply to Dr Hon Lam Tai-fai's question is as follows.
(a) The number of applications received and amount of loan approved each month is set out at the annex.
(b)-(g) TID has been closely monitoring the operation and effectiveness of the Scheme. The Scheme is well received by the trade. Many participating lending institutions have also offered incentive packages to help promote the Scheme. Since the launch of the Scheme, more than 4,000 applications were received in a month during the peak period. So far, over $74 billion of loans have been granted. The problem of credit crunch faced by enterprises during the financial tsunami has been alleviated. We consider the Scheme has positively contributed to "stabilising the financial system, supporting enterprises and preserving employment".
The application period for the Scheme is scheduled to end on June 30, 2010. We have received comments through different channels (including LegCo Members, political parties and trade and industrial associations), including requests for further extension of the Scheme. We have conducted a review to decide whether the application period should be further extended. During the review process, we have taken into account factors such as the latest economic and credit market conditions, as well as the pace of economic recovery in the latter half of this year. The result will be announced shortly.
Ends/Wednesday, April 21, 2010
Issued at HKT 11:02
NNNN
