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Thursday, November 8, 1973
The range of manufacturing concerns eligible to seek loans has
been extended by raising the upper limit of applicants' funds from $600,000
to $1 million.
It is believed that the scheme has also been made more attractive
to the smaller firms by introducing a sliding scale of charges for the
feasibility studies conducted by the Hong Kong Productivity Centre to
evaluate the merit of loan applications.
The charges now range from $500 for loans between $30,000 and
$50,000 to $1,000 for loans of more than $100,000.
Less strict requirements concerning the production of audited
accounts have also been introduced.
Mr. Porter said that, although the need for a feasibility study
had come under fire in the past, it was the only practical way of determining
the soundness of loan applications, in view of the fact that no collateral
security is required.
He stressed that the study was designed to protect applicants from
embarking on projects which were likely to lose them money, and to ensure
that they obtained the most suitable equipment available for their specific
needs.
Another reason for it was to avoid exposing the participating banks
to undue risks. This applied equally to public funds, since the Government
is committed to underwriting 50 per cent of any losses.
Mr. Porter commented: "The sliding scale of charges is far from
being excessive. They are well below what it would cost if a firm of private
consultants was engaged to do the job."
He pointed