Hong Kong encourages small businesses with easy loans

Hong Kong has launched a three-year microfinance loan scheme to foster entrepreneurship in a sputtering economy.

The Hong Kong Mortgage Corporation, Ltd with six banks and five non-governmental organizations are partnering in the scheme that could lend up to HK$100 million to qualified firms.

“Although the size of microfinance loans is somewhat modest, I believe the loans can still provide a good measure of assistance to the borrowers,” said John Tsang, Chairman of the HKMC and Hong Kong’s Financial Secretary.

The scheme offers three categories of loans: Micro Business Start-Up Loans, Self-Employment Loans and Self-Enhancement Loans.

The maximum amount for each loan in the three loan categories is HK$300,000, HK$200,000 and HK$100,000, respectively.

The maximum loan length is five years, with an interest rate of not more than 9% p.a. for general borrowers and of not more than 8% p.a. for borrowers who can provide a third-party guarantee. Borrowers may also enjoy a principal repayment holiday for up to 12 months.

Target borrowers are business starters, self-employed persons and those wanting to achieve self-enhancement through training, upgrading of skills or securing professional certification, but cannot do so due to a lack of financial means, or difficulty in obtaining loans from traditional finance sources.

Applicants must be aged 18 or above, and not subject to any bankruptcy order or proceedings at the time of application.