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Up to 70pc of loans guaranteed for small and medium-sized enterprises

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The government will guarantee up to 70 per cent of bank loans to small and medium-sized enterprises to help boost investment and job creation.

Many of them are still trying to rebuild their finances after the global economic downturn.

The move is a vote of confidence, especially for banks which find lending to such businesses lucrative but full of risk.

Impending legislation for a minimum hourly wage of HK$28 from next year is also expected to put pressure on the SMEs.

Financial Secretary John Tsang Chun-wah said the SME Financing Guarantee Scheme, which starts on January 1, would provide 'a sustainable and flexible financing platform' for the enterprises.

A Special Loan Guarantee Scheme brought in to help SMEs weather the financial crisis is set to expire at the end of this year.

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