Over 30,000 Hong Kong companies enjoy six-month repayment holiday on HK$380 billion in loans under HKMA scheme to help them survive economic slump
- Hong Kong’s de facto central bank for the first time has told banks to offer a break for SMEs to repay loans as the city reels from Covid-19 and political unrest
- From June 21, the government will start to accept applications for all permanent residents to receive HK$10,000 each, with payments to be made in July
Hong Kong’s banks have so far granted about 30,000 companies a six-month repayment holiday for a combined HK$380 billion (US$49.03 billion) in loans to help them cope with the dire economic slump, according to the city’s de facto central bank.
All SMEs with an annual turnover of HK$800 million or below can enjoy the break. This qualification covers 80 per cent of corporate borrowers in Hong Kong. The borrowers, who must have no record of overdue payments for more than 30 days, will only need to repay the interest owed during this period.
“All banks have offered quick approval for both schemes to their corporate clients in a bid to help them solve their cash flow problems. We believe these schemes will be useful to support the many companies at this challenging time,” he said.
Aviva rebukes HSBC, StanChart over support for Hong Kong national security law
In addition, 11,000 homeowners have been approved for a repayment holiday on mortgage loans worth HK$29 billion for various periods of times.
Yuen admitted the poor economy has led to an increase in bad debts to 0.62 per cent of total loans in Hong Kong, up from 0.57 per cent at the end of last year and 0.55 per cent at the end of 2018. But overall, he said the level remained low.
“We will adjust the schemes to offer more assistance to the companies which are in the sectors which are most hard hit. There will be an enhancement to both plans to make sure banks can help the corporate customers to pass through the crisis,” Yuen said.
No threat to Hong Kong’s crown as international financial centre, says AXA
The city’s gross domestic product shrank 8.9 per cent year on year in the first three months of the year, which is the worst for a single quarter since records started in 1974. Many SMEs are struggling to make ends meet, triggering the government to offer a HK$29 billion rescue package, including wage subsidies to help companies pay half their staff’s salary up to HK$9,000 a month.
From June 21, the government will start to accept applications via banks or post offices for all permanent residents to receive HK$10,000 each. Payments will be made in July.
“We expect a substantial application for the HK$10,000 handout will be made via online platforms of banks. This will further promote digital banking in Hong Kong,” Yuen said.