HKMA Lists Banks Receiving Applications for 100% Loan Guarantee Scheme
HKMA published a statement that the HKMC Insurance Limited (HKMCI) announced that, the Special 100% Loan Guarantee under the SME Financing Guarantee Scheme (SFGS) will start receiving applications from April 20, 2020. HKMCI welcomes all lenders under the SFGS to participate in the Special 100% Loan Guarantee and the lenders that will receive applications are Bank of China (Hong Kong) Limited, Bank of Communications (Hong Kong) Limited, Chong Hing Bank Limited, DBS Bank (Hong Kong) Limited, Hang Seng Bank Limited, Nanyang Commercial Bank, Ltd., OCBC Wing Hang Bank Limited, Standard Chartered Bank (Hong Kong) Limited, The Bank of East Asia, Limited and The Hongkong and Shanghai Banking Corporation Limited. In addition to this, some other lenders have indicated their interest in participation.
The Special 100% Loan Guarantee is applicable to all sectors and was announced on April 03, 2020 to alleviate the challenges caused by the COVID-19 pandemic. Earlier, HKMA had also outlined the treatment of these loans under the Banking (Exposure Limits) Rules (BELR) and the Banking (Capital) Rules (BCR). The loans under this scheme will be fully guaranteed by the government. Eligible enterprises should have been operating for at least three months as at end-December 2019 and have suffered at least a 30% decline in sales turnover in any month since February 2020 compared with the monthly average of any quarter in 2019. An interest rate of the Prime Rate minus 2.5% per annum (that is, current interest rate at 2.75%) will be charged. All guarantee fee will be waived. The maximum amount of the loan per enterprise is the total amount of employee wages and rents for six months, or HKD 2 million, whichever is lower. Enterprises may also apply for an optional principal moratorium for the first 6 months, to alleviate instant burden on repayment. Subject to approval of funding by the Finance Committee of the Legislative Council, the maximum loan amount per enterprise will be increased to HKD 4 million and the principal moratorium arrangement will be extended to the first 12 months.
Keywords: Asia Pacific, Hong Kong, Banking, COVID-19, SME, HKCMI, Guarantee Scheme, SFGS, Capital Adequacy, List of Banks, Credit Risk, HKMA
Featured Experts
Victor Calanog, Ph.D.
Leading economist; commercial real estate; performance forecasting, econometric infrastructure; data modeling; credit risk modeling; portfolio assessment; custom commercial real estate analysis; thought leader.
Related Articles
EBA Analyzes Impact of Unwind Mechanism of Liquidity Coverage Ratio
EBA published a report analyzing the impact of the unwind mechanism of the liquidity coverage ratio (LCR) for a sample of European banks over a three-year period, from the end of 2016 to the first quarter of 2020.
ECB Outlines Views on Possible Changes to AnaCredit Rule and TLTROs
In response to questions from a member of the European Parliament, the ECB President Christine Lagarde issued a letter clarifying the possibility of amending the AnaCredit Regulation and making targeted longer-term refinancing operations (TLTROs) dependent on the climate-related impact of bank loans.
IASB Begins First Phase of Post-Implementation Review of IFRS 9
IASB started the post-implementation review of the classification and measurement requirements in IFRS 9 on financial instruments and added the review as a project to its work plan.
FSB Report Examines Progress in Resolvability of Systemic Institutions
FSB published a report that examines progress in implementing policy measures to enhance the resolvability of systemically important financial institutions.
EBA Benchmarks National Insolvency Frameworks Across EU
EBA published a report on the benchmarking of national loan enforcement frameworks across 27 EU member states, in response to the call for advice from EC.
FSB Reports Assess Impact of Pandemic on Financial Stability
FSB published a letter from its Chair Randal K. Quarles, along with two reports exploring various aspects of the market turmoil resulting from the COVID-19 event.
RBNZ Consults on Implementation of Capital Review Changes
RBNZ launched a consultation on the details for implementing the final Capital Review decisions announced in December 2019.
IASB Announces Andreas Barckow as the New Chair from July 2021
The Trustees of the IFRS Foundation, which are responsible for the governance and oversight of IASB, have announced the appointment of Dr. Andreas Barckow as the IASB Chair, effective July 2021.
HKMA Consults on Capital Rules for Bank Equity Investments in Funds
HKMA issued a letter to consult the banking industry on a full set of proposed draft amendments to the Banking (Capital) Rules for implementing the Basel standard on capital requirements for banks’ equity investments in funds in Hong Kong.
ESRB Supports Extension of Macro-Prudential Measure by Swedish FSA
ESRB published an opinion assessing the decision of Swedish Financial Supervisory Authority (FSA) to extend the application period of a stricter measure for residential mortgage lending, in accordance with Article 458 of the Capital Requirements Regulation (CRR).
