Firms critical of aid plan to bolster their cash flow

PUBLISHED : Thursday, 27 August, 1998, 12:00am
UPDATED : Thursday, 27 August, 1998, 12:00am

Small and medium-sized enterprises (SMEs) yesterday criticised the Government's decision to make $2.5 billion in loans available to them to help relieve their financial difficulties.

Attending a seminar organised by the Chinese Manufacturers' Association of Hong Kong (CMA) on the special finance scheme, more than 100 representatives from SMEs denounced the assistance as 'helping nobody'.

They said making financial institutions the sole assessment agents for the loans would create difficulties.

'If we fail to get a bank's approval in normal circumstances, how can we expect the bank to re-assess our applications under the government's scheme?' asked Cecilia Kung, marketing manager at UnionIce Manufacturing.

But Industry Department Development Support Division principal trade officer Tony Cheung Chun-keung said the Government had no intention of helping SMEs with unhealthy balance sheets.

'We want to help marginal cases, such as companies facing short-term cash-flow problems as a result of the devalued mortgage price,' he said.

The Government has set a ceiling of not lending more than $2 million to any SME. Mr Cheung said this level would be increased if demand was strong.