Supplementary Question on Council Meeting:Q5 Vetting and approval of the Special 100% Loan Guarantee

Vetting and approval of the Special 100% Loan Guarantee


Thank you, President.  First of all, I declare that I work as a consultant for a financial institution.  As stated in the main reply and as mentioned by the Secretary earlier, insofar as Special Loan applications are concerned, HKMCI is responsible for their vetting and approval, whereas banks are only responsible for submitting to HKMCI the complete set of documents provided by the applying enterprises for approval.  In other words, the banks do not have a part to play in the decision on loan approval.  The purpose of the Government in introducing the Special Loan is to relieve the pressure of enterprises that cannot pay the employees’ wages or rent due to a decline in revenue, so as to reduce the number of business closures and cases of layoff, rather than helping enterprises to expand their businesses.  So, regarding the case provided in the main question in which the applicant said that the lending bank first told him that his application was approved, thus spurring him to proceed to business expansion, this seems to be somehow different from the purpose of the loan and this, I think, is utterly puzzling.

In any case, I would like to ask the Bureau this: Before the scheme commenced, it should have briefed all potential applicants on the application details of the scheme, and after the scheme has operated for some time and some experiences have been accumulated, such as after some applications were rejected, has the Bureau, targeting some common problems, further explained to potential applicants the criteria for vetting and approval, the common misconceptions, etc., in order to avoid unnecessary misunderstanding?


I thank the Member for his views and supplementary question.  Of all the cases rejected, an extremely small number of cases were actually rejected on the ground that the required documents were not submitted.  Only two cases have been rejected due to problems relating to documents, whereas the rest was rejected for other reasons.  Therefore, overall, the application process is very smooth, and the enterprises know very well what documents they are required to submit.

In fact, the documents required are very simple, such as the proof of employees’ wages, and the total of employees’ wages and the rent.  They have to show a difference of over 30% in the sales turnover of the enterprise in a month during the approval period compared with a month during the reference period, and the enterprise can then meet the eligibility, and even its repayment ability will not be assessed.  Actually this is very easy, far easier than general loan applications.  So, there should not be any misunderstanding in the process.  With regard to communication, there has been constant communication with the applying enterprises to explain to them what documents they need to submit for their applications.  Overall speaking, the scheme has been operating very smoothly.