Financial Secretary Paul Chan Mo-po delivers his opening remarks at the Milken Institute's inaugural Global Investors' Symposium on March 26, 2024. (PHOTO / HKSAR GOVERNMENT)
As changing consumer behavior among tourists and inadequate industry confidence create challenges for small and medium-sized enterprises, Hong Kong is ramping up efforts to help them in improving financial liquidity, exploring market opportunities and digital transformation, says Financial Secretary Paul Chan Mo-po.
Writing in his Sunday blog, Chan said the local economy has maintained steady growth in the first quarter of this year, with the unemployment rate at below 3 percent and inflation remaining moderate. The number of visitor arrivals has risen to more than 11 million so far.
“The steady macroeconomic conditions have offered support to local industries, such as retail, catering and transportation,” Chan said. “However, despite these positive trends, industry confidence declined due to shifting consumption patterns among visitors and Hong Kong residents’ increased cross-boundary spending on the Chinese mainland.”
To address the capital-flow challenges for SMEs, the application period for the 80-percent and 90-percent Guarantee Products under the SME Financing Guarantee Scheme has been expanded for two years to the end of March, 2026
In view of the current situation, the Hong Kong Special Administrative Region government unveiled an array of measures in the 2024-25 Budget in February, aimed at alleviating the pressures faced by SMEs.
To address the capital-flow challenges for SMEs, the application period for the 80-percent and 90-percent Guarantee Products under the SME Financing Guarantee Scheme has been expanded for two years to the end of March, 2026. The total guaranteed commitment under the program has been increased by HK$10 billion ($1.28 billion).
The Hong Kong Monetary Authority, together with the Banking Sector SME Lending Coordination Mechanism, rolled out nine measures on Thursday to support SMEs in obtaining financing from banks. Mortgage customers who make repayments on schedule will not be asked to repay their loans early, while customers will be given a transition period of at least six months for credit-limit adjustments.
In addition, “the government is making significant strides in driving the advancement of financial technology, to cater to the financing requirements of SMEs efficiently, while effectively mitigating risks,” the finance chief said.
The banking industry is encouraged to make greater use of the Commercial Data Interchange initiative launched by the HKMA to provide tailored credit products and services for SMEs, including cross-boundary banking services, digital business solutions and e-commerce applications, Chan added.
Moreover, the HKMA plans to set up a one-stop platform, which will provide transparent and easily accessible information on the products and services offered by different banks, enabling SMEs to select the most suitable options.
Apart from providing financial support, it’s important to bring more visitors to the city and unleash their consumption potential, said Chan.
The SAR has successfully hosted three high-profile financial events over three consecutive days from March 25. These events, along with a series of business dinners and seminars, have attracted more than 1,000 political and business leaders, asset owners, and representatives of multinational financial institutions.
Every 1.5 million visitors are expected to create revenue of around HK$3 billion, Chan pointed out, adding that both the financial events and art activities being concurrently are poised to attract more tourists to Hong Kong, helping to generate positive ambiance in the city and stimulate consumption.
