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As Occupy Central enters its ninth day, the side effects of the movement are beginning to manifest themselves as social order remains in a state of turmoil. Many small and medium enterprises (SMEs) are beginning to feel the pinch of the protests. The Business and Professionals Alliance for Hong Kong (BPA) today (October 6) urged the Administration to set up a government guaranteed loan prgramme, similar to the one set up in 2003 during the outbreak of Severe Acute Respiratory Syndrome (SARS). The programme would cater for SMEs adversely affected by Occupy Central to stave off bankruptcies and job losses by easing cash-flow difficulties with paying rent and staff salaries.
Mr Andrew Leung Kwan-yuen, BPA Chairman, pointed out that since the occurrence of Occupy Central many SMEs have reported that this has had the negative implications of staff late arrivals, fall in business receipts, and disruptions to routine operations. The catering industry has borne the brunt of the fallout from the Occupy movement due to blockages of major roads. This has resulted in delivery delays and serious inconvenience to drivers who sometimes have to resort to transporting goods on foot, which imposes undue burden and hazard to the personal well-being of these employees. In some cases, restaurants have been forced to shut down operations after running out of supplies. Mr Leung was worried that if Occupy Central were to continue many SMEs would encounter dire cash-flow problems thereby affecting their ability to pay rent and salaries in a timely manner.
With the welfare of SMEs in mind and to help them tide over cash-flow issues, the BPA has submitted to government the proposal to extend low-interest loans to this segment of the business community. The BPA will be following up on its proposal to ensure implementation.
Mr Jeffrey Lam Kin-fung emphasized that the business environment for SMEs have been extremely difficult in recent years due to rising costs and that they are unlikely to have enough resources or capacity to cope with problems brought on by the Occupy movement, which at this point has no end in sight. The BPA has therefore drawn on the experience of government’s response to SARS in 2003 and calls upon the Administration to extend similar assistance to SMEs in overcoming the current hardships through the provision of low-interest loans. These loans shall be used by SMEs to pay salaries to ensure job losses are minimized to the fullest extent possible.
According to government data, almost HK$500 million in loans were approved at the conclusion of the SARS-related relief programme. Industries eligible for assistance included restaurants, hotels, travel agencies, tourist coach operators, and retailers, among others. Applicants can apply for a loan covering three months of their firm’s salary payments. Interest charged was based on the average best lending rate of note-issuing banks minus 3% payable monthly in arrears. After the six-month grace period for repayment, the loan was repayable from the seventh month on a diminishing balance basis after the date of initial drawing over a maximum of 24 monthly instalments.