The Hong Kong Mortgage Corporation Limited (HKMC) announced on Monday that it has approved the launch of the SME Financing Guarantee Scheme as a market-oriented platform based on commercial principles to assist local small and medium-sized enterprises (SMEs).

The scheme, taking effect from January 1, 2011, aimed to assist non-listed enterprises with business operation in Hong Kong to obtain loans from banks so as to provide general working capital for their business operations or to acquire equipment and assets in relation to their business, said the HKMC.

Under the scheme, the HKMC will provide guarantee coverage on 50 percent to 70 percent of the bank financing for eligible enterprises. The maximum loan amount for each enterprise or each group of enterprise under cover is 12 million HK dollars (1.55 billion US dollars).

"SMEs are a cornerstone of the Hong Kong economy. According to our experience in the past two years, assisting SMEs to obtain sustainable bank financing is one of the key factors that helped Hong Kong weather the global financial tsunami," said Norman Chan, deputy chairman of the HKMC.

"With the expiry of the government's Special Loan Guarantee Scheme, it is timely for the HKMC to launch this new guarantee scheme which will help SMEs obtain sustainable bank financing."