Policy Statement & Submission

HKGCC welcomes SME funding boost

The Hong Kong General Chamber of Commerce warmly welcomes the announcement today by Chief Executive Mr Tung Chee Hwa to broaden the scope of the current government funding schemes to assist small and medium enterprises (SMEs).

Since the establishment of the funding schemes last year, the Chamber has been collecting members' feedback and reflecting the SMEs' views to the government. The Chamber has proposed to the government, among other things, that the limit for the SME Business Installations and Equipment Loan Guarantee Scheme should be raised, and that its scope should be extended to working capital. “We are extremely pleased that Mr Tung has heeded our call and modified the Scheme accordingly,” said Dr Eden Woon, Chamber CEO.

According to the government announcement, the ceiling of the Loan Guarantee Scheme would be extended to $4 million, 50% of which could be used for working capital and accounts receivable. The guarantee period would be extended from 3 years to 5 years. The previous limit was $1 million and was limited to installations and equipment only.

“To make the Scheme work, the cooperation of banks would be essential,” added Dr Woon. The Chamber has suggested that the banks should move away from the bricks-and-mortar approach in considering loan applications; instead more weight should be given to business factors such as orders in hand, track record, business prospects, taxes paid etc., in assessing the bank's portion of the risk under the Scheme.

The revamp in the funding schemes also includes the upping of the funding limit for the SME Export Market Fund. Under the current Scheme SMEs are allowed a once-in-a-life-time grant of up to $10,000 for exhibitions or trade missions, but this limit has now been raised to $40,000 and multiple applications are allowed. Similarly, entitlement in the SME Training Fund has been doubled from the current $15,000 to $30,000. Application process is also being streamlined.

“I have no doubt these improvements will make the funding schemes more effective in helping SMEs, and I give credit to the government for the responsive and flexible manner in which it has reacted to the business community,” said Dr Woon.

While these government measures are useful, Dr Woon stressed that eventually what SMEs looked for was the recovery of the economy at large. “At the end of the day, what would be most useful for SMEs would be a turnaround in our economy. Everyone has a part to play. Business must look for ways to become more competitive, the government should continue to simplify procedures and remove barriers, and the community must work together,” said Dr Woon.

For enquiries, please contact Dr Eden Woon, CEO, Tel: 2823-1211.