LegCo Panel on Trade and Industry

SPECIAL FINANCE SCHEME FOR
SMALL AND MEDIUM ENTERPRISES

INTRODUCTION

This is a progress report on the operation of the Special Finance Scheme for Small and Medium enterprises (SMEs).

BACKGROUND

2. The Scheme is part of the package of special relief measures announced by the Government on 22 June 1998. The purpose of the Scheme is to help SMEs to cope with the liquidity crunch problem and to secure bank loans to meet genuine commercially viable business needs.

3. On 31 July 1998, the Finance Committee of the Legislative Council approved the financial commitment of $2.5 billion for the establishment of the Scheme. The Scheme was launched on 24 August 1998.

LATEST POSITION

Publicity

4. The Government continues to publicise the Scheme through various promotional activities including newspaper and magazines advertisements, leaflets and posters, announcement of public interest on TV and radio stations and briefing sessions for industrial and trade organisations and participating lending institutions. Besides, Industry Department's homepage on the Scheme has been regularly updated to show the latest list of participating lending institutions so as to facilitate SMEs' access to the Scheme.

Response to the Scheme

5. As of 8 October 1998, a total of 119 applications have been received under the Scheme. With the exception of two applications which have been withdrawn by the applicants, all of the applications have been approved with the loan involved amounting to HK$219 million.

6. The detailed statistics showing the various aspects of the performance of the Scheme as of 8 October 1998 are set out in Annex.

WAY FORWARD

7. Since the introduction of the Scheme, the Government has been closely monitoring its performance as well as soliciting the views of relevant parties on its operation. We intend to conduct a more comprehensive review of the Scheme in early 1999 to give the relevant government departments as well as financial institutions and SMEs participating in the Scheme time to accumulate practical experience under the Scheme. The review will also take into account the views expressed by the relevant parties on the operation of the Scheme.

Trade and Industry Bureau
October 1998