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Following is a transcript (English portion) of a stand-up media session by the Secretary for Commerce and Economic Development, Mrs Rita Lau, at the Main Wing lobby of Central Government Offices today (November 10), announcing the Government・s further support measures for small and medium-sized enterprises:
SCED: To assist the Small and Medium Enterprises (SMEs) to overcome difficulties arising from the recent financial crisis, the Government has been working very closely with the legislators, chambers of commerce, SME associations and business sectors. And I have held a SME summit to gather the views.
There is a very strong call for the Government to take further action to assist SMEs to obtain capital from the banks. We have therefore come up with a proposal to set up a time-limited ：Special SME Loan Guarantee Scheme；.
The scheme features the Government committing $7 billion to provide up to 70% loan guarantee under the scheme, it would facilitate the granting of a total of $10 billion・s credit to SMEs.
Under the newly proposed scheme, an SME may obtain a maximum of $1 million credit facilities, within which a revolving credit line up to $500,000 can be granted. The Government・s guarantee ratio will be 70% with or without the revolving line.
Applications under this special scheme will be open for six months starting from the implementation date. A grace period of six months would be available, during which the borrower may only need to pay the interest and not the principal. Thereafter, the repayment of the loan will spread over a maximum of 24 months.
We believe this special loan guarantee scheme will help SMEs obtain necessary relief amid the current credit crunch under the very stringent external environment.
In addition, the Export Credit Insurance Corporation (ECIC) will launch new enhanced measures to offer better protection for exporters. These include the provision of higher cover for exports generally and in particular for emerging markets, the ECIC will be as accommodative and flexible as possible to the SMEs・ requests for export credit insurance, and the ECIC will expedite the processing of small credit limit applications.
To strengthen ECIC・s underwriting capacity, the Government will increase its Statutory Maximum Liability from $15 billion to $30 billion.
The next step will be for the Government to present these proposals to the Legislative Council・s Commerce & Industry Panel which will hold a special meeting on November 12. I hope the proposals will receive strong support from the LegCo Members. Our game plan is to seek LegCo・s special dispensation so that these proposals could be put to the Finance Committee as soon as possible.
Ends/Monday, November 10, 2008
Issued at HKT 19:42
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