Speech at Panel on Commerce and Industry

Briefings by the Secretary for Commerce and Economic Development, the Secretary for Constitutional and Mainland Affairs and the Secretary for Innovation and Technology on the Chief Executive’s 2019 Policy Address

Enhancing support for enterprises

Mr CHAN Chun-ying declared that he was an advisor of a Chinese-funded bank in Hong Kong. He enquired whether the Administration would implement dedicated support measures to help Chinese-funded enterprises and SMEs targeted by vandalism. He also urged the Administration to take decisive actions to stop the violent protests and restore Hong Kong’s favourable business environment.

SCED replied that the Administration’s support measures, such as the proposed introduction of a new 90% loan guarantee product under SFGS, were intended to assist Hong Kong enterprises across the board rather than targeting enterprises in specific sectors. Meanwhile, HKMA would continue to liaise with banks on measures to help SMEs obtain bank loans. The Administration would in parallel promote communication between the banks and SMEs through different platforms for better understanding of mutual needs and requirements. To help SMEs explore business opportunities on the Mainland, the Administration had been organizing trade promotion campaigns through collaborating with Hong Kong Trade Development Council (“HKTDC”), trade associations and local authorities in the Greater Bay Area.


New support measures for small and medium enterprises

SME Financing Guarantee Scheme

Mr CHAN Chun-ying declared that he was the consultant of a Chinese-funded bank which was one of the participating lending institutions under SFGS, and expressed support for the Administration’s proposed enhancement measures. Noting that the maximum amount of loans each successful applicant could obtain loan guarantee under the proposed 90% guarantee product (i.e. up to HK$6 million at any point in time) was far below from that of the existing 80% guarantee product (i.e. up to HK$15 million), Mr CHAN enquired about the reasons for such differences. He also enquired about the target date for rolling out the proposed 90% guarantee product.

Executive Director and Chief Executive Officer, The Hong Kong Mortgage Corporation Limited (“ED&CEO/HKMC”) responded that the proposed 90% guarantee product aimed to help enterprises tide over potential financing difficulties amidst the economic downturn, and provide additional support to enterprises with less operating experience, limited credit history, and those enterprises lacking the expertise or resources to produce financial statements. The maximum amount of loans each enterprise could obtain loan guarantee under the proposed 90% guarantee product would be capped at HK$6 million at any point in time. ED&CEO/HKMC said that the banking industry and relevant organizations and major stakeholders generally supported the proposed 90% guarantee product and called for early implementation. The Hong Kong Mortgage Corporation Limited would maintain close liaison with the trade, learn from the operational experiences and regularly review the implementation of the 90% guarantee product.

SCED added that subject to the Panel’s support, the Administration planned to seek funding approval of the Finance Committee (“FC”) in the fourth quarter of 2019 with a view to rolling out the proposed 90% guarantee product in the first quarter of 2020.

SME funding schemes

Mr CHAN Chun-ying noted that the Administration and Hong Kong Productivity Council had respectively organized the SME Symposium and the SME One Fund Fair 2019 in September 2019 to provide SMEs with details of nearly 50 government funding schemes and new initiatives. Yet, given the large number of funding schemes and initiatives, Mr CHAN asked whether the Administration would help individual SMEs identify funding schemes most suitable to their business needs for application.

SCED said that the Administration was aware of the difficulties SMEs had encountered when making funding applications. In addition to making relevant information of all the funding schemes available on the Internet, the Administration: (a) had brought together nearly 50 funding schemes administered by the Government and public organizations in Hong Kong and the Greater Bay Area (with a total value of over HK$35 billion) at different promotional events for introduction to SMEs to raise their awareness; (b) had since October 2019 consolidated the services of four SME centres to provide “four-in-one” integrated services so that SMEs could obtain information on all funding schemes at any service point; (c) had extended its reach to enterprises by arranging visits to more than 30 trade and industrial associations; and (d) would establish a dedicated service team to provide support on funding applications from 1 January 2020. The implementation of such measures would provide a more tailored service for SMEs and at the same time allow the Administration to receive feedbacks directly from SMEs for further enhancing the effectiveness of the funding schemes.

SCED further pointed out that any proposals for consolidating different funding schemes required FC’s approval and the procedures would likely take considerable time. To meet the needs of SMEs, the Administration would continue to promote all the relevant funding schemes together, further simplify the application procedures and provide a larger proportion of upfront payments.

Mr CHAN Chun-ying said that while the Administration had briefed FA Panel on the work of HKMA three times a year where members were given the progress updates on SFGS, he enquired whether the Administration would similarly submit to the Panel regular progress updates on SME funding schemes so that the Panel might monitor the implementation progress on a continuous basis.

SCED replied that apart from regular reports to the Panel on the implementation progress of the SME funding schemes, the Administration would also share such figures on various occasions when necessary. Individual members might also seek relevant information from the Commerce and Economic Development Bureau and the Trade and Industry Department anytime during the year.