Unemployed Hongkongers to be offered low-interest loans of up HK$80,000 guaranteed by government for first time
- The government is offering to guarantee low-interest personal loans for unemployed people, with the city’s jobless rate at a 17-year high
- The interest rate is just 1 per cent, and borrowers can get a full refund of the interest paid after the loan is fully repaid
The 10 participating banks initially include HSBC, Hang Seng Bank and Bank of China (Hong Kong), with two more joining in May.
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“Hong Kong’s economy has been hard hit by the Covid-19, and the labour market faces severe challenges,” said Financial Secretary Paul Chan Mo-po in the statement from HKMC.
“This scheme aims to provide a supplementary financing option to individuals suffering from cessation of main recurrent incomes, to help them tide over the interim difficulty.”
Borrowers can opt for a repayment period of up to six years. They will need to pay a fixed interest rate of 1 per cent per year and can choose to repay only interest in the first 12 months. They can get a full refund of the interest paid after the loan is fully repaid, according to HKMC’s statement.
Under the scheme, the government is offering a 100 per cent guarantee, so if the borrowers default it will repay the loans in full. This allows the banks not to worry about bad debt risks.