Three of Hong Kong's government-backed borrowing schemes will be extended by six months in a bid to ease the continuing burden on individuals and companies created by the Covid-19 pandemic, the city's leader has revealed.
Chief Executive Carrie Lam Cheng Yuet-ngor on Tuesday said the three funds in question were the 100% personal loan guarantee scheme, the SME financing guarantee scheme and the preapproved principal payment holiday scheme.
"Some industries are still suffering, especially in terms of cash flow, even though there have been signs of economic recovery," Lam said at a press briefing before her weekly cabinet meeting.
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"Borrowers of these three schemes will have relief, because the schemes will be extended for six months."
The schemes - created to help Hong Kong businesses reeling from the economic havoc unleashed by the pandemic - have so far granted a total of HK$170 billion ($21.8 billion) in loans to 67,000 applicants, including 41,600 companies employing 610,000 staff members.
The SME financing guarantee scheme, managed by the Hong Kong Mortgage Corporation, was first introduced in 2012, then subsequently expanded as a pandemic relief measure. It offers three loan products in which 80, 90 or 100 per cent of the funds are guaranteed by the government.
"This means companies will be only required to repay interest, not principal, for a total of 24 months," Lam said.
The preapproved principal payment holiday scheme for companies - introduced in May last year and administered through banks - will be extended until April. It was previously extended in May and November 2021.
The other measure being stretched through April is the 100 per cent personal loan guarantee scheme introduced by Financial Secretary Paul Chan Mo-po earlier this year in his annual budget address.
The plan allows Hong Kong permanent residents without jobs to borrow up to HK$80,000, or six times the average monthly income, at an annualised 1 per cent interest rate. The repayment period is six years.