Small and medium enterprises have eagerly embraced the Government's four SME funding schemes - especially since their ceilings were raised and their scopes expanded, the Secretary for Commerce, Industry & Technology John Tsang said.

Speaking in reply to a question from Selina Chow in the Legislative Council today, Mr Tsang said that, as at October 18, about 42,000 applications have been approved under the four schemes. They involved loan guarantees and grants of a about $2.96 billion.

The schemes were established in 2001, to encourage SMEs to strive for continuous self-improvement and help them obtain financing, open up external markets, upgrade human resources and enhance competitiveness.

Schemes' ceilings raised, scope expanded

In February, the Government took the SME Committee's advice, raising the maximum grant amounts SMEs could receive under the SME Export Marketing Fund and SME Training Fund. 

In March, the SME Loan Guarantee Scheme's scope was expanded to cover working capital loan guarantees. And to help SMEs enhance their competitiveness in the wake of the SARS outbreak, the ceilings of the marketing and training funds were raised yet again.

The maximum amount of combined loan guarantee and grants an SME may receive under the above three schemes has substantially increased, to $4.11 million from $1.025 million, Mr Tsang said.

As a result, more SMEs are taking advantage of the schemes. The average number of applications for the SME Loan Guarantee Scheme received per week has increased from 64 before the implementation of the improvement measures to 116 - an 81% increase. The applications for the Export Marketing Fund have increased more than 400%, from 66 to 340. Those for the SME Training Fund, surged from 215 to 618, an increase of more than 200%.

Breaking down the funding by schemes

The following shows how the funding breaks down by schemes.

* About 7,000 applications for the SME Loan Gurantee Scheme were approved, representing a success rate of about 99% and involving loan guarantees of $2.654 billion. Of these applications, about 150 were related to the wholesale and retail sector, with loan guarantees amounting to approximately $50 million.

* About 11,000 applications for the Export Marketing Fund were approved, representing a success rate of about 95% and involving grants of about $165 million. Of these applications, about 560 were related to the wholesale and retail sector, with grants amounting to approximately $8.2 million.

* About 24,000 applications for the SME Training Fund were approved, representing a success rate of about 94% and involving grants of about $73 million.Of these applications, about 1,300 were related to the wholesale and retail sector, with grants amounting to approximately $4.4 million.

* A total of 58 applications for the SME Development Fund were approved, representing a success rate of about 15% and involving grants of about $65 million. One of the funded projects aims primarily to assist SMEs in the wholesale and retail sector to enhance supply-chain management through information technology.