HSBC will refund up to HK$20,000 (US$2,548.96) in interest payments to its small-and-medium enterprise customers to help them cope with the challenges arising from the China-US trade war and the increasingly violent protests that have rocked Hong Kong. The biggest of three note-issuing banks in the city is the first lender to take action to help the SMEs, which are facing the worst economic crisis in a decade. Financial Secretary Paul Chan Mo-po has warned the city might go into recession in the third quarter and face job losses. The lender, the biggest in Hong Kong and Europe, is offering an interest rebate to SMEs under two types of loan on repayments made between March and August, up to HK$20,000 each. Hang Seng Bank, a subsidiary of HSBC, will also offer the same six-month interest rebates of up to HK$20,000 to its SMEs customers under the same loan programmes. The two schemes are the SME Financing Guarantee Scheme and the SME Loan Guarantee Scheme, which are both guaranteed by the government. SMEs who take out these loans must pay a fee for the government to guarantee the loan. Last year HSBC began to offer a subsidy of up to HK$50,000 for them to pay the fee. The bank will extend the subsidy by two more years until June 30, 2022, instead of ending it in the middle of next year, as previously planned. HSBC will also cut the fee paid by merchants for its PayMe business by half to 0.75 per cent from 1.5 per cent from September 2 until the end of the year. PayMe is HSBC’s payment system which allows individuals to transfer funds, while shops and restaurants can also use it to accept payments from shoppers for a fee. At 0.75 per cent, it will be lower than normal credit card fees of 1 to 2 per cent of the transaction value. Thailand’s richest man calls for peace and order in Hong Kong “SMEs are the heartbeat of our economy: they account for over 98 per cent of local enterprises and around 45 per cent of total employment. We have spent time listening to our customers and have heard their voices at this difficult time,” said Terence Chiu, head of commercial banking for Hong Kong at HSBC. “That is why we are launching three measures to support them. We will always stand with our customers in Hong Kong and are committed to helping them thrive in all economic conditions.” This marks the biggest offer by HSBC to help its customers to cope with tough times in a decade. The last time HSBC offered interest rebates to corporate clients was in 2009 when the city was hit hard by the global financial crisis. In 2003, the bank offered HK$100 million to help individuals and companies when the city was hit by the Sars outbreak. Hong Kong protests 2019 vs Occupy Central: after 79 days, retailers, investors, developers hit far worse by this year’s demonstrations The Hong Kong Monetary Authority, the de facto central bank, welcomed HSBC and Hang Seng’s move. “We have reminded banks from time to time to support SMEs’ funding needs to the extent permitted by their credit policies and risk management standards,” an HKMA spokesman said in a statement to the Post . Many SMEs in trading and export businesses have been hit hard by the year-long trade war between the US and China, while shops, restaurants and other businesses have suffered during the street protests in the last 12 weeks. The protests against a now-suspended extradition bill, which started peacefully on June 9, have become increasingly violent, denting tourist numbers by over 30 per cent in August. Many small local businesses like restaurants and shops have seen their incomes dry up and have come under pressure to lay off staff or even close down.