Replies to initial written questions raised by Finance Committee Members in examining the Estimates of Expenditure 2012-13 Director of Bureau : Secretary for Commerce and Economic Development Session No. 12 File name : cedb(cit)- doc
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- Examination of Estimates of Expenditure 2012-13
Question : Please list out with a breakdown by sector the number of cases and the success rate of application for the SME Financing Guarantee Scheme in the past year. What is the total guarantee amount and the average time needed for approving an application? What is the expected number of applications and total guarantee amount within the 9 months after the introduction of new concessionary measures? Asked by : Hon. Tommy CHEUNG Yu-yan Reply : The Hong Kong Mortgage Corporation Limited (HKMC) introduced a market-oriented and sustainable Small and Medium Enterprises (SME) Financing Guarantee Scheme (SFGS) on 1 January 2011. The Scheme facilitates SMEs in obtaining finance from banks and helps reduce banks’ lending risks, thereby contributing to the stability of our banking system. As at 31 January 2012, HKMC has received 250 applications and approved 246 applications under the SFGS, involving a total loan amount of around $840 million and a total guarantee amount of around $560 million. The remaining applications are under processing. A breakdown of the SFGS applications approved as at 31 January 2012 by sector is set out in the table below -
* Of 246 approved applications, the applicants of 10 applications are engaged in more than one industry sectors. SFGS is administered in accordance with prudent commercial practices. All guarantee applications approved should meet the requirements for obtaining a guarantee under the SFGS and should be supported by relevant documents. In general, HKMC would notify the lending institutions of the result of the applications in writing in about three working days upon receipt of complete information from the lending institutions. Given the fluctuations in the external economic environment, SMEs may have to face financing difficulties as a result of a credit crunch. To help SMEs, the Financial Secretary proposed in the 2012-13 Budget to introduce special time-limited concessionary measures under the existing SFGS. Under the measures, the loan guarantee ratio will be increased from the existing ceiling of 70% to 80%, and the guarantee fee will be reduced substantially. The application period will last for nine months. The Government will provide a total guarantee commitment of $100 billion for the special concessionary measures. As the number of applications and the total guarantee amount involved will be affected by a number of factors, including the prevailing economic situation and the demand from the market, we are unable to provide relevant estimates at this moment.
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