The Hong Kong government says it will introduce a range of measures to help local small and medium-sized enterprises (SMEs) beat the credit crunch.

Plans include a newly enlarged fund that could guarantee letters of credit (L/Cs).

Top up

The former British colony revealed in October its plans to revive the fortunes of Hong Kong's credit starved SME sector by introducing the SME Loan Guarantee Scheme (SGS).

Hong Kong Chief Executive Donald Tsang Yam-kuen now says the government will increase the value of the SGS guarantee fund to HK$100 billion (US$13 billion) to help struggling local companies.

Terms

The maximum amount guaranteed for each SME in the SGS would be HK$6 million, half of which could be used as revolving loans.

The fund may be used for L/Cs, commercial overdrafts or operational expenses.

Eligibility

All Hong Kong firms except listed companies are eligible to apply for support under the SGS, which is expected to receive legislative approval by late January.

The Hong Kong government is also reported to be working closely with the Chinese government to help support Hong Kong companies with investments and facilities on the mainland.

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