*********************************************
Preparing for the Future
Microfinance
174. Some people at grass-roots level may wish to start their own businesses or take self-enhancement training. However, they may not have sufficient financial resources to do so. What they need is not a large sum, but their loan applications may be rejected by banks or finance companies because they cannot provide collaterals or do not have a stable income, or they may have to bear a high interest rate on the loan. This may frustrate their plans to start their own businesses or deprive them of self-improvement opportunities.
175. Some financial institutions abroad have introduced various loan schemes to help these people. Besides offering loans that are relatively affordable, these institutions also provide services such as mentorship to assist people in starting their own businesses, enhancing their skills and boosting their self-confidence. Successful examples abroad, such as MicroBank of Spain, have one feature in common, which is that loans are granted only after careful assessment of the borrowerˇ¦s willingness and ability to repay, thereby preventing these loans from being used or regarded as a kind of welfare benefit. Appropriate guidance will also be given to applicants on starting up businesses. The ultimate objective is to operate the loan schemes on a self-financing and sustainable basis.
176. I have asked the HKMC to study the feasibility of establishing a sustainable "Microfinance" scheme in Hong Kong and the demand for such facilities. The HKMC will invite bankers and voluntary agencies to form a study group, consult stakeholders and organisations concerned, and submit recommendations to me within six months.
Injection into Mandatory Provident Fund Accounts
177. The Mandatory Provident Fund (MPF) System and other occupational retirement schemes have been functioning well to assist our working population to save up for better retirement protection. We hope to increase the retirement savings of scheme members. In this connection, I propose to make a one-off injection of $6,000 into the MPF accounts of all MPF scheme members and members of occupational retirement schemes covered by the Employment Ordinance of Hong Kong as of February 23, 2011. To assist more citizens in preparing for retirement, no salary ceiling will be imposed for the injection proposal. The proposal will not increase inflationary pressure and is drawn up in the light of our fiscal position.
178. I have earmarked $24 billion for this measure. The Financial Services and the Treasury Bureau will announce the details in due course, and the Mandatory Provident Fund Authority will assist in implementing the injection. I expect that the injection of funds into the MPF accounts will start in 2011-12.
(To be continued)
Ends/Wednesday, February 23, 2011
Issued at HKT 12:51
NNNN
