No plans to revive pandemic-era guaranteed loan scheme for SMEs: Hong Kong commerce chief
- ‘As the economy gradually recovers, it’s a heavy burden on the government if we maintain a 100 per cent loan guarantee,’ Algernon Yau says
Hong Kong’s commerce minister has ruled out reintroducing a pandemic-era special guaranteed loan scheme to help small and medium-sized enterprises (SMEs) despite the economic downturn, highlighting the huge burden it would put on the public purse.
Secretary for Commerce and Economic Development Algernon Yau Ying-wah said on Saturday the latest default rate of the “Special 100% Loan Guarantee Scheme” stood at 9.2 per cent since its launch in 2020. The government was shouldering a loan guarantee amount of HK$13.2 billion (US$1.7 billion), he added.
The government stopped accepting applications for the scheme at the end of March.
“The scheme was introduced in Hong Kong during the pandemic when the economy almost ground to a halt because of the closing of borders. It was a special measure to help SMEs,” Yau told a radio programme.
“As the economy gradually recovers, it’s a heavy burden on the government if we maintain a 100 per cent loan guarantee.
“We will keep a close eye on the situation, but as it stands, there is no decision to reintroduce the scheme.”