Budget Speech

Preparing for the Future

Microfinance

174.      Some people at grass-roots level may wish to start their own businesses or take self-enhancement training. However, they may not have sufficient financial resources to do so. What they need is not a large sum, but their loan applications may be rejected by banks or finance companies because they cannot provide collaterals or do not have a stable income, or they may have to bear a high interest rate on the loan. This may frustrate their plans to start their own businesses or deprive them of self-improvement opportunities.

175.      Some financial institutions abroad have introduced various loan schemes to help these people. Besides offering loans that are relatively affordable, these institutions also provide services such as mentorship to assist people in starting their own businesses, enhancing their skills and boosting their self-confidence. Successful examples abroad, such as MicroBank of Spain, have one feature in common, which is that loans are granted only after careful assessment of the borrower’s willingness and ability to repay, thereby preventing these loans from being used or regarded as a kind of welfare benefit. Appropriate guidance will also be given to applicants on starting up businesses. The ultimate objective is to operate the loan schemes on a self-financing and sustainable basis.

176.      I have asked the HKMC to study the feasibility of establishing a sustainable “Microfinance” scheme in Hong Kong and the demand for such facilities. The HKMC will invite bankers and voluntary agencies to form a study group, consult stakeholders and organisations concerned, and submit recommendations to me within six months.

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