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. These actions are intended to further alleviate the cash flow pressure on small and medium-size enterprises (SMEs). The maximum amount of loan per enterprise will be raised from the total amount of employee wages and rents for 12 months to that for 18 months, or HKD 6 million (originally HKD 5 million), whichever is lower. Meanwhile, the maximum repayment period of the guaranteed loans will be increased from 5 years to 8 years and the principal moratorium arrangement will be extended from up to 12 months to up to 18 months.
To benefit from these enhancements, eligible enterprises should have been operating for at least three months as at June 30, 2020 and should have suffered at least a 30% decline in sales turnover in any month since February 2020 compared with the monthly average of any quarter from early 2019 to mid-2020. HKMC Insurance Limited is proactively undertaking the preparatory work with the lending institutions and strives to roll out these enhancement measures within one month. The implementation date will be announced later. By that time, borrowers with the existing loans may apply to their lending institutions for increasing the loan amount, extending the repayment period, and/or extending the principal moratorium period if they deem appropriate. In general, no additional supporting documents will be required.
Keywords: Asia Pacific, Hong Kong, Banking, Loan Guarantee, Credit Risk, Payment Deferrals, SME, COVID-19, HKMA
Previous Article
EBA Proposes Standards for Supervisory Cooperation Under IFDRelated Articles
BIS and Central Banks Experiment with GenAI to Assess Climate Risks
A recent report from the Bank for International Settlements (BIS) Innovation Hub details Project Gaia, a collaboration between the BIS Innovation Hub Eurosystem Center and certain central banks in Europe
Nearly 25% G-SIBs Commit to Adopting TNFD Nature-Related Disclosures
Nature-related risks are increasing in severity and frequency, affecting businesses, capital providers, financial systems, and economies.
Singapore to Mandate Climate Disclosures from FY2025
Singapore recently took a significant step toward turning climate ambition into action, with the introduction of mandatory climate-related disclosures for listed and large non-listed companies
SEC Finalizes Climate-Related Disclosures Rule
The U.S. Securities and Exchange Commission (SEC) has finalized the long-awaited rule that mandates climate-related disclosures for domestic and foreign publicly listed companies in the U.S.
EBA Proposes Standards Related to Standardized Credit Risk Approach
The European Banking Authority (EBA) has been taking significant steps toward implementing the Basel III framework and strengthening the regulatory framework for credit institutions in the EU
US Regulators Release Stress Test Scenarios for Banks
The U.S. regulators recently released baseline and severely adverse scenarios, along with other details, for stress testing the banks in 2024. The relevant U.S. banking regulators are the Federal Reserve Bank (FED), the Federal Deposit Insurance Corporation (FDIC), and the Office of the Comptroller of the Currency (OCC).
Asian Governments Aim for Interoperability in AI Governance Frameworks
The regulatory landscape for artificial intelligence (AI), including the generative kind, is evolving rapidly, with governments and regulators aiming to address the challenges and opportunities presented by this transformative technology.
EBA Proposes Operational Risk Standards Under Final Basel III Package
The European Union (EU) has been working on the final elements of Basel III standards, with endorsement of the Banking Package and the publication of the European Banking Authority (EBA) roadmap on Basel III implementation in December 2023.
EFRAG Proposes XBRL Taxonomy and Standard for Listed SMEs Under ESRS
The European Financial Reporting Advisory Group (EFRAG), which plays a crucial role in shaping corporate reporting standards in European Union (EU), is seeking comments, until May 21, 2024, on the Exposure Draft ESRS for listed SMEs.
ECB to Expand Climate Change Work in 2024-2025
Banking regulators worldwide are increasingly focusing on addressing, monitoring, and supervising the institutions' exposure to climate and environmental risks.