MOP 300,000 loan to spur young entrepreneurs

2013-6-4

From：Macau Daily Times

The government is offering a MOP300,000 interest-free loan for local residents aged between 21 and 44 to start up their own business. The loan is an attempt to encourage entrepreneurship among the younger generation and to diversify the city’s economic structure, shifting it to a more sustainable model.
However, the plan’s sustainability has been questioned, as most inexperienced business operators fail in their first endeavor and may not be able to repay their loans. The authorities admit that business failures among newcomers have been common in recent years, and that “there’s no hundred percent guarantee” of success.
Late last year, the government announced a plan to help young people establish their own companies. Yesterday, the Executive Council disclosed the details of the program, titled “Young Entrepreneurs Assistance Scheme”. The program provides loans of up to MOP300,000 for permanent residents between the ages of 21 and 44. Applicants must not have previously established a company or business, and cannot be major shareholders controlling over 50 percent of any corporation’s ownership.
Leong Heng Teng, ExCo’s spokesperson, said that the age limit was set at a higher level due to the Scheme’s spirit of encouraging entrepreneurship among the public.
“Macau’s age range is greater than neighboring regions (where similar schemes are implemented), such as 21-35 [years of age] in Hong Kong, 28-35 in the mainland, because these places have their concerns over unemployment rates,” said Leong, adding that Macau’s program places more focus on the cultivation of entrepreneurship.
When asked about public concerns regarding the possible failure of, and debt incurred by, newcomers in the business sector, Leong responded by saying that “there’s no hundred percent guarantee in (anything).” He stressed that the financial assistance was meant to encourage young people to establish their own companies and learn how to run a business.
“There might be some problems, such as business failure (…) in recent years there are some such cases. It’s quite common. But still, many young people want to practice and gain experience in operating a business, to use their own skills and knowledge to find their own direction. We can make this judgment from the business registration information the authority collected,” Leong explained.
He stressed that for loans of over MOP100,000; the debtor will have to find a guarantor to shoulder the liability of the loans. However, the requirement is waived for loans below this figure. All repayments will have to be honored within 8 years.
Leong also reminded potential business operators that the Scheme is different from the current loan system for small and medium-sizes enterprises (SMEs). The current SME loan has a borrowing limit of MOP600,000, but owners must have at least 2 years of practical experience in business operations. Individuals who have borrowed money under the Young Entrepreneur Assistance Scheme will be able to apply for loans under the SMEs Assistance Scheme after at least 2 years. Applying will also reduce credit ceilings for individuals. For example, a person given MOP300,000 under the former scheme can borrow a maximum of MOP300,000 under the latter.
Leong said that the new scheme doesn’t limit the industries in which the debtors can engage. Young entrepreneurs can choose whatever business they like, or whatever they believe will make a profit under the current market conditions.
He concluded that relevant government departments are finalizing further terms and conditions for the Scheme, which will commence on the day following the release of an executive dispatch. It is currently unclear when the program will take effect.

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