Budget Speech

Support for Small and Medium Enterprises

77.      Small and Medium Enterprises (SMEs) are an important pillar of our economy and employment market. In 2008, a credit crunch and market dislocation swept the world. To mitigate the impact of the financial tsunami on Hong Kong, the Government launched the $100 billion Special Loan Guarantee Scheme in December 2008. The Scheme has helped more than 20 000 enterprises and indirectly preserved more than 340 000 jobs.

78.      With improved financing for SMEs, the Special Loan Guarantee Scheme ceased to accept applications at the end of last year. In January, the Hong Kong Mortgage Corporation Limited (HKMC) launched a market-oriented SME Financing Guarantee Scheme to help SMEs obtain sustainable bank financing for their daily operations or acquisition of equipment. This Scheme will meet the financing needs of SMEs while helping banks manage their lending risks more effectively. As at end-January, 16 banks have already joined this Scheme.

79.      The SME Loan Guarantee Scheme of the Trade and Industry Department (TID) has been well received by enterprises. With the introduction of enhancement measures under the Scheme in November 2008, SMEs now have greater flexibility in using the loan guarantees. As at end-January 2011, the TID approved loan guarantees of over $15 billion, involving loans of around $33 billion and benefiting over 12 000 SMEs. To demonstrate the Government’s continued support for SMEs, I propose to increase the total guarantee commitment under the SME Loan Guarantee Scheme substantially from $20 billion to $30 billion.

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