Over $1b Personal Loans Approved

Secretary for Financial Services & the Treasury Christopher Hui said today over $1 billion was approved under the 100% Personal Loan Guarantee Scheme, with an average loan size of around $71,000.

Introduced in the 2021-22 Budget, the scheme aims to provide a supplementary financing option for people suffering from the cessation of main recurrent incomes from employment in Hong Kong due to the COVID-19 pandemic.

Fourteen participating banks are responsible for vetting loan applications, while HKMC Insurance (HKMCI), as the scheme administrator, conducts customer due diligence and verifies applicants’ eligibility.

In response to lawmaker Chan Hak-kan’s questions at the Legislative Council, Mr Hui said as of June 25, the banks received 46,411 applications, 31% of which had been submitted by the banks to and approved by HKMCI, involving a total loan amount of over $1 billion and an average loan size of around $71,000. The borrowers came from different industries, including the transportation, logistics, retail, construction, catering, tourism and hotel sectors.

As far as the approved applications are concerned, the banks took an average of 17 working days to process an application. HKMCI normally approved a loan within three working days upon receiving an application from the banks.

Mr Hui said HKMCI and the banks have implemented a number of measures to refine the vetting procedures and provide clearer guidelines on documentation requirements.

A more flexible approach was adopted to consider the documentary proof requirements regarding residential addresses and unemployment.

In addition, applicants who took up part-time or temporary jobs with non-recurrent incomes during the unemployment period were accepted.

To offer flexibility to applicants who became unemployed at the early stage of the pandemic, the income reference period was extended from the last quarter of 2019 to any three months in the second half of 2019.

The banks will continue to contact each applicant and follow up on applications to expedite the processing of loan applications, Mr Hui added.