The Legislative Council (LegCo) of Hong Kong Special Administrative Region (HKSAR) approved a new scheme Monday to provide greater support to small and medium enterprises (SMEs) amid global financial crisis.

Ten participating lending institutions were ready to take on new applications and enhancement measures in the SME Loan Guarantee Scheme, which will be implemented starting Nov. 6, according to the HKSAR government.

The sub-ceilings for the Business Installations and Equipment Loans and Working Capital Loans will be removed while the overall guarantee cap for each SME will remain at 6 million HK dollars ( about 769,000 U.S. dollars).

The maximum guarantee period for the working capital loans will be extended from two years to five. Each SME can recycle the guarantee once after it has fully paid up the loan, so each SME can get a maximum amount of guarantee of 12 million HK dollars (1. 54 million U.S. dollars) in its lifetime.

According to the new measures, the indicative ceiling of guarantee exposure for each participating lending institutions will be raised from 1.25 billion HK dollars (160 million U.S. dollars) to 1.5 billion HK dollars (205 million U.S. dollars) to provide them more "quota" in granting loans.

Local banks in Hong Kong began granting less loans to SMEs and order stricter conditions for lending as global credit crisis swept through the globe.

To avoid wide-spread laid-offs and bankruptcies among SMEs, the HKSAR government has pledged to do more to help SMEs tide over the difficulty in the crisis.

(Xinhua News Agency November 3, 2008)