 |
| Home >Hong Kong |
Latest News
 
| advanced search >> |
- No right to amend Basic Law for immigration control: Counsel
- Govt pledges caution over cross-border vehicle plan
- Nostalgia for British colonial rule ignores ongoing progress
- Budget supports elderly care
- Fool's gold
- HK retains title of most globalized economy for second year running
- Two lessons can be learnt from current CE Election
- The problem is not 'non-local' women but intermediaries
- CE refutes conflict of interest claims
- Right of abode appeal opens
1 of 0 Email
|  Print
|  Share
|  Text Size |   |
Hong Kong Mortgage Corporation (HKMC) will launch a three-year microfinance pilot scheme in mid 2012 with a government-backed HK$100 million funding as announced in the 2012-23 Budget on Wednesday.
"The HKMC will establish a centralized microfinance platform that comprises HKMC, local banks and voluntary agencies for processing applications, providing funding to the scheme, performing vetting, referring customers, managing loan credit risks and arranging mentoring and monitoring services,” HKMC Executive Director Peter Pang said in a press briefing on Thursday.
"HKMC’s stance on funding provision is flexible. The HKMC and local banks can each contribute 50 percent to fund the pilot scheme, or local banks can opt not to contribute to the scheme at all. (In which case), HKMC will then contribute 100 percent funding to the pilot scheme,” Pang stressed.
Financial Secretary John Tsang in the 2011-12 Budget asked the HKMC to study the feasibility of establishing a microfinance scheme in the city to promote more business start-ups when local entrepreneurs face difficulties to get traditional business loans from local banks. The HKMC submitted the microfinance study group report to the government in last August.
- Government allays auto invasion fears
- Community Care Fund plans hand out
- Tsang budget under fire for ignoring underprivileged
This type of financing usually originates in developing countries but the trend is now spreading to developed economies.
According to the study report, HKMC stressed that the microfinance pilot scheme will operate based on commercial principles. It proposed three segments of microfinance loans, namely micro business start-up loans, self-employment loans and self-enhancement loans. The maximum loan amount for each loan in these three categories would be HK$300,000, HK$200,000 and HK$100,000 respectively. The maximum microfinance loan tenor will be five years.
"Regarding the interest rate charged to the entrepreneurs, HKMC envisages that it may resemble the personal loan interest rate, that is to say, approximately 8 to 9 percent. Regarding the loan default rate, HKMC hopes that it can be below 5 percent,” Pang added.
Pang said HKMC will work with local banks and voluntary agencies to provide adequate business mentoring and monitoring services so that business starters can have a higher chance of survival. In due course, this can help slash the loan default rate.