Gov’t proposes additional MOP400m guarantee to SME credit scheme

2014-1-3

From：Macau Daily Times

The MSAR plans to increase the maximum amount of credit guaranteed for SMEs from the current MOP500 million to MOP900 million, the Executive Council (ExCo) announced yesterday.
ExCo has completed discussion on the amendment of the bill regarding the government’s debt liability as guarantor for SME bank loans. The revision is because the current credit amount provided by the government is insufficient to fully support the increasing number of SMEs and their increased production scale in recent years, according to spokesman Leong Heng Teng. Furthermore, the “fluctuation” of the economy in Europe and the U.S. adds uncertainty to Macau’s economic environment.
The “SME Credit Guarantee Scheme” is one of the measures that the government introduced back in 2003 to help SMEs acquire the necessary capital from banks to survive the economic downturn brought on by SARS. The maximum credit guarantee totaled MOP300 million, including MOP200m on the “SME Credit Guarantee Scheme” and MOP100m on the “SME Credit Guarantee Scheme Designated for Special Projects,” which aims to support SMEs  develop projects to reform and alter their type of business; to promote and advertise their own brands; or to improve the quality of their own products. The maximum figure for the “SME Credit Guarantee Scheme” was raised to MOP500m and has been in effect till now.
As for the “SME Credit Guarantee Scheme Designated for Special Projects,” the MOP
100million ceiling amount has been unchanged since its induction in 2003. Also, the current bill amendment, if approved by the Legislative Assembly (AL), will not involve an increase to the maximum credit amount for the latter scheme.
According to the “SME Credit Guarantee Scheme,” each beneficiary is provided with a credit guarantee equal to 70 percent of the loan approved by the participating banks. The maximum guarantee offered is MOP3.5 million. The “SME Credit Guarantee Scheme Designated for Special Projects” provides a credit guarantee of up to 100 percent of the amount needed. The special projects scheme also aims to assist SMEs in resolving short-term financial difficulties (especially those induced by unpredictable matters such as natural disasters or epidemic diseases). The maximum guaranteed amount offered per beneficiary under this scheme is MOP 1 million.
From 2003 to 2012, the “SME Credit Guarantee Scheme” received 308 applications of which 295 were approved, involving an agreed amount of credit guarantees worth more than MOP115million, according to figures from Macao Economic Services.

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