HK throws start-ups a lifeline

A pilot micro-financing scheme just proposed by the government will entitle self-employed individuals and those undertaking self-enhancement training to borrow up to HK$300,000 each.

The Hong Kong Mortgage Corporation, a unit of the Hong Kong Monetary Authority, and a number of banks will launch the three-year scheme to offer small loans by the middle of this year. Eligible start-ups and individuals can get loans ranging from HK$100,000 to HK$300,000.

HKMC will allocate HK$100 million for the pilot scheme that will have a five-year repayment period. Borrowing rates have yet to be specified, but may range between 8% to 20%.

Credit will be granted for up to five years and applicants will be required to submit business plans.

HKMC Executive Director Peter Pang Sing-tong said those eager to start businesses such as recycling or mobile phone software would be particularly interested in the loans.

"We also found that self-employed people in beauty care, transport and Chinese herbal medicine are eager for loans." Increasing numbers are also studying gemology.

Loans are only valid for courses not covered by the Student Financial Assistance Agency or Employees Retraining Board.