On March 1, Hong Kong Finance and Treasury Secretary Xu Zhengyu said to the Finance Committee that the government plans to launch a 100% guaranteed personal preferential loan program. This month, it will apply to the Finance Committee for funding, involving a maximum credit guarantee commitment of HK$15 billion. It is expected to be implemented within one month after approval.
He pointed out that the overall bad debt rate is assumed to be 25%, and other costs and necessary out-of-pocket expenses include the preliminary quality assurance inspections, audit inspections, and debt recovery for default payments during the loan application stage. In order to use public funds prudently, unless further approval is obtained from the Finance Committee, the insurance company will not continue to grant any loan guarantees when the credit guarantee commitment exceeds HK$15 billion.
He also pointed out that he understands that all sectors have different requirements, but it is difficult to have a policy that can fully satisfy everyone. Therefore, the relevant plan will only focus on the unemployed and exclude categories such as unpaid leave and graduates. At the same time, the government, securities companies, and banks have their own roles. There is no such thing as introducing all responsibilities. If the borrower is unable to repay, the specific implementation will be handled in accordance with the bank’s commercial procedures.
Reprint indicated source：Spark Global Limited information