The HKMA together with the Banking Sector SME Lending Coordination Mechanism announced today the launch of a Pre-approved Principal Payment Holiday Scheme for eligible corporate customers. The key features of the Scheme are:
In light of the economic challenges brought about by the COVID-19 outbreak, the banking sector considers it essential for the Scheme to be implemented quickly in order to alleviate the cash-flow pressure faced by corporate customers. Considering the Scheme’s novel nature and the need to roll it out within a short period, the HKMA has reminded banks to devote sufficient resources to ensuring the smooth operation of the Scheme, and to set up hotlines for customers who wish to make enquiries. The HKMA will monitor the operation of the Scheme and maintain close dialogues with banks with the aim of improving the Scheme’s implementation on an ongoing basis. For more details about the Scheme, please refer to the attachment.
The Banking Sector SME Lending Coordination Mechanism was established by the HKMA in October 2019. Participating banks have expanded from the 9 banks most active in SME lending at establishment to 11 banks at present. The Hong Kong Association of Banks and the HKMC Insurance Limited are represented in the Mechanism. Since its establishment, the Mechanism has rolled out four rounds of relief measures for corporate and retail customers, including principal payment holidays for SMEs and residential mortgages, loan tenor extensions, and the conversion of trade financing lines into temporary overdraft facilities. The measures have worked as intended—as at the end of March 2020, nearly 9,000 SME applications for relief measures have been approved by banks active in SME financing, amounting to over HK$57 billion. Banks have approved over 2,800 principal payment holiday applications for residential mortgages and emergency personal loans, involving an aggregate amount of over HK$8 billion.
Hong Kong Monetary Authority
17 April 2020