Pilot loan project boost for small enterprises
The Hong Kong Mortgage Corporation (HKMC) said yesterday it would launch a three-year microfinance project with banks to provide loans to business start-ups that have difficulty obtaining credit.
The agency, which aims to promote wider home ownership and develop the local debt market, said net profit rose about 4.4 per cent to nearly HK$1.26 billion year on year.
HKMC said it expected the pilot microfinance scheme to take off around mid-year.
Loans to business starters will be capped at HK$300,000, those to self-employed people at HK$200,000, and those to people who 'receive self-enhancement training' at HK$100,000.
Several of the city's banks are expected to work with the HKMC.
The agency purchased HK$9.7 billion of loans in the city last year.
Some HK$26.3 billion of new loans were drawn under the Mortgage Insurance Programme. Up to 97 per cent of these loans were used for property in the secondary market.
The HKMC, which issued HK$28.5 billion of debt last year, was the most active issuer of corporate debt in the Hong Kong dollar market since 2001.
The agency issued its first yuan bond in Hong Kong last year, raising 600 million yuan (HK$741.26 million).
Management said the HKMC continued to seek prudent prefunding from local and overseas debt markets to support loan purchases and refinancing.
The HKMC also carried out an initiative to help small and medium-sized enterprises (SMEs). In January last year, it introduced the SME Financing Guarantee Scheme, which had 286 applicants by last Wednesday. The Reverse Mortgage Programme was launched in July of last year to help retirees. It had 225 applicants by last Wednesday.
The HKMC's capital adequacy reached 19.7 per cent when measured against risk-weighted assets.
Return on equity, a measure of profitability against shareholder's capital, was 15.5 per cent, down two percentage points from 2010.
The HKMC's cost-income ratio rose 0.8 percentage points to 11.8 per cent.
The net interest margin remained flat at 1.7 per cent.
The HKMC proposed a final dividend of HK$350 million to the government's Exchange Fund.
The total amount, in HK dollars, that the Hong Kong Mortgage Corporation expects to lend under its microfinance scheme