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
HKMA Enhances Loan Guarantee Scheme to Alleviate Pressure on SMEs
HKMA announced that enhancements will be made to the Special 100% Loan Guarantee of the SME Financing Guarantee Scheme (SFGS) and the application period will be extended to December 31, 2021.
EBA Proposes Standards for Supervisory Cooperation Under IFD
EBA launched consultations on the regulatory and implementing technical standards on cooperation and information exchange between competent authorities involved in prudential supervision of investment firms.
BoE Sets Out Plan to Transform Data Collection from Financial Sector
BoE has set out a three-phased plan to transform data collection from the UK financial sector over the next decade.
BIS Issues Updates on Technology Initiatives on Cross-Border Payments
BIS recently made a couple of announcements with respect to the planned and ongoing work in the area of financial technology.
ESRB Updates List of Macro-Prudential Measures in February 2021
ESRB updated the list of national macro-prudential measures applied by each member state in the European Economic Area.
BoE Survey Shows Positive COVID Impact on Outsourced Banking Services
BoE has set out results of a survey on the impact of COVID-19 events on the use of machine learning and data science.
ECB Issues Opinion on Proposal to Regulate Crypto-Asset Markets in EU
In response to a request from the European Council and Parliament, ECB published an opinion on the proposed regulation on markets in crypto-assets.
APRA Announces Aggregate Committed Liquidity Facility for Banks
APRA announced the updated aggregate amounts for the 2021 Committed Liquidity Facility (CLF) established between the Reserve Bank of Australia (RBA) and certain locally incorporated authorized deposit-taking institutions that are subject to the Liquidity Coverage Ratio (LCR).
ECB and UK Authorities Agree on Post-Brexit Supervisory Cooperation
ECB published supervisory Memorandums of Understanding (MoUs) with UK as well as other European and non-European authorities.
EIOPA Outlines Strategic Supervisory Priorities for Insurance Sector
EIOPA identified business model sustainability and adequate product design as the two EU-wide strategic supervisory priorities.
