SUNDAY, OCTOBER 27, 1974
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BIGGER LOANS FOR INDUSTRIAL DEVELOPMENT
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BIGGER LOANS TO PROMOTE INDUSTRIAL DEVELOPMENT IN HONG KONG CAN NOW BE OBTAINED UNDER THE GOVERNMENT'S LOAN SCHEME FOR SMALL
INDUSTRIES.
THE COMMERCE AND INDUSTRY DEPARTMENT ANNOUNCED TODAY THAT THE UPPER LOAN LIMIT HAS BEEN RAISED TO $500,000 -- DOUBLE THE PREVIOUS CEILING OF $250,000.
THE SCHEME HAS ALSO BEEN MODIFIED TO ENABLE A WIDER RANGE OF INDUSTRIAL FIRMS TO PARTICIPATE BY INCREASING THE UPPER LIMIT ON PROPRIETORS' FUNDS FROM $1 MILLION TO $2 MILLION.
+WE HOPE THESE MINOR MODIFICATIONS WILL STIMULATE A GREATER DEMANDS FOR LOANS,+ SAID A SPOKESMAN FOR THE COMMERCE AND INDUSTRY DEPARTMENT.
HE STRESSED THAT THE SCHEME WAS NOT DESIGNED TO PROVIDE WORKING CAPITAL, BUT WAS INTENDED TO FOSTER INDUSTRIAL DEVELOPMENT BY MAKING LOANS AVAILABLE FOR BUYING NEW MACHINERY AND EQUIPMENT.
+THE OBJECT IS TO PROVIDE AN INCENTIVE TO INDUSTRIAL CONCERNS TO SEEK FUNDS FOR MODERNISING THEIR FACTORIES, INCREASING THEIR EFFICIENCY AND BOOSTING THEIR PRODUCTIVE CAPACITY, THE SPOKESMAN ADDED.
HE POINTED OUT THAT THERE WAS A NEED FOR INDUSTRIAL FIRMS TO UP-DATE THEIR MANUFACTURING TECHNIQUES IN ORDER TO STAY AHEAD OF. THEIR COMPETITORS IN WORLD MARKETS.
ACTION TO MODIFY THE SCHEME HAS BEEN TAKEN ON THE ADVICE OF THE TRADE AND INDUSTRY ADVISORY BOARD AND THE NEW TERMS COME INTO IMMEDIATE EFFECT.
THE +LOANS FOR SMALL INDUSTRY+ SCHEME IS A JOINT VENTURE BETWEEN THE GOVERNMENT AND THE COMMERCIAL BANKING SECTOR. IT CAME INTO OPERATION IN JULY, 1972, FOR A TRIAL PERIOD OF THREE YEARS AND SUBJECT TO A TOTAL LOAN COMMITMENT OF $30 MILLION.
SINCE THE SCHEME WAS STARTED LOANS TOTALLING $1,441,000 HAVE BEEN MADE.
BEFORE A LOAN IS MADE, THE APPLICANT FACTORY IS EXAMINED BY THE HONG KONG PRODUCTIVITY CENTRE WHICH SUBMITS A DETAILED REPORT TO THE COMMERCE AND INDUSTRY DEPARTMENT ON THE VIABILITY AND LIKELY EFFECT OF THE PROPOSED NEW MACHINERY ON THE FACTORY'S PRODUCTION, PRODUCTIVITY AND PROFITS.
REPAYMENT OF THE LN IS OVER A PERIOD OF UP TO FIVE YEARS
AT THE PRIME INTEREST RATE PLUS TWO PER CENT TO COVER THE PRODUCTIVITY CENTRE'S COSTS AND THE GOVERNMENT'S RISK IN UNDERWRITING 50 PER CENT OF THE LOAN AMOUNT AGAINST FAILURE TO PAY.
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