Core Viewpoint - The Hong Kong government has announced an extension of the "SME Financing Guarantee Scheme," increasing the total credit guarantee amount and extending the repayment arrangements for businesses [1] Group 1: Policy Changes - The application period for 80% of the credit guarantee products under the "SME Financing Guarantee Scheme" will be extended by two years until the end of March 2028 [1] - The total credit guarantee amount will be increased by an additional HKD 20 billion, bringing the total to HKD 310 billion [1] - The "interest-only repayment" arrangement will be extended for another year, with the application period now ending on November 17, 2026 [1] Group 2: Eligibility and Application - Eligible borrowing enterprises can apply for up to 12 months of "interest-only repayment" period before November 17, 2025, and an additional 12 months from November 18, 2025, to November 17, 2026, totaling a maximum of 24 months [1] - For new loans starting from November 18, 2025, eligible borrowing enterprises can apply for up to 12 months of "interest-only repayment" period before November 17, 2026 [1] - Borrowing enterprises can contact lending institutions starting from November 1, 2025, to inquire about specific arrangements [1]

Group 1 - The Hong Kong government has implemented special relief measures, including the "100% Guaranteed Personal Special Loan Scheme" and the "100% Guaranteed SME Special Loan Scheme," to support citizens and businesses during the ongoing pandemic challenges [1][2] - The "100% Guaranteed Personal Special Loan Scheme" has approved loans totaling HKD 4.66 billion, benefiting over 59,000 individuals, with an average loan amount of HKD 78,500. Approximately one-third of borrowers had a monthly income of HKD 12,000 or below before losing their main income [1] - The "100% Guaranteed SME Special Loan Scheme" has approved loans totaling HKD 143.9 billion, benefiting around 40,000 businesses and their 400,000 employees, aligning with the government's policy goals of supporting enterprises and preserving jobs [1] Group 2 - The estimated bad debt rate for the two loan schemes is set at 25%, but the actual cumulative bad debt rates as of mid-May are 15.6% for the SME scheme and 19.3% for the personal scheme, both lower than the estimated rate [2] - There have been 3,552 suspicious cases identified in the SME loan scheme, representing about 5% of total applications, involving loan amounts of approximately HKD 10.5 billion. A significant portion of these cases was flagged during the application review process [3] - In the personal loan scheme, 1,989 suspicious cases were identified, with nearly 80% being rejected during the application review, indicating effective risk management measures in place [3]

Core Viewpoint - The Hong Kong government has implemented a "100% Guaranteed Special Loan" under the "SME Financing Guarantee Scheme," with a focus on managing bad debts and ensuring financial support for small and medium enterprises [1][2][3] Group 1: Bad Debt Management - As of April 2025, the cumulative bad debt rates for the 80%, 90%, and 100% special guarantee products are approximately 5.2%, 4.2%, and 15.6%, respectively, which are lower than the assumed overall bad debt rates of 12%, 16%, and 25% [1] - The Hong Kong Mortgage Corporation has been actively collaborating with lending institutions to manage default cases, including negotiating repayment plans with borrowing enterprises [2] - Approximately 5,400 cases of bad debts under the 100% special guarantee products are currently being pursued, with about 3,500 cases undergoing legal action [2] Group 2: Financial Implications - The revised budget for the 2024-2025 fiscal year allocated HKD 12.5 billion for management fees, administrative expenses, and bad debt repayments related to the scheme [1][3] - The actual bad debt rate may fluctuate based on the overall economic environment and the operational status of individual borrowing enterprises [3] - There are 3,519 applications suspected of involving illegal activities, with a total loan amount of approximately HKD 10.5 billion, leading to the rejection of 1,512 cases during the review process [3]