Hong Kong budget: more than 250,000 jobless workers to be offered 1 per cent interest loans in unprecedented measure

According to a source, HK$10 billion will be set aside for the loans, capped at HK$80,000, which will have an annual interest rate of 1 per cent

But unions, which have been calling for the creation of an unemployment support fund, were muted in their enthusiasm

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Borrowers will get the interest they paid back if the loan is repaid on time. Photo: Shutterstock

Published: 7:30am, 23 Feb 2021Updated: 12:30am, 24 Feb 2021

Unemployed Hongkongers will be offered low-interest bank loans – capped at HK$80,000 – under an unprecedented budget measure targeting more than 250,000 jobless workers, the Post has learned, a proposal greeted with caution by the city’s unions.

Financial Secretary Paul Chan Mo-po will announce the one-off personal loan scheme, fully guaranteed by the government, for the first time in his budget speech on Wednesday. In previous budgets, such measures were devised only for small to medium-sized companies.

A total of HK$10 billion (US$1.28 billion) would be set aside for the loans, a source close to the budget formulation process said.

Financial Secretary Paul Chan. Photo: Nora Tam

The scheme was said to be a more targeted measure to help those who had lost their jobs, with the city’s economy devastated by the Covid-19 pandemic. The city’s unemployment rate has hit 7 per cent, close to a 17-year high, meaning more than 250,000 people are out of work.

“Without cash handouts, the administration still hopes to help the unemployed survive this difficult time,” the source said.

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