Tourism loan scheme needs more time: lawmakers
Lawmakers on Monday urged the authorities to give businesses in the travel sector more time to apply for government-backed loans under a HK$2.3 billion scheme and to avoid excluding companies that are in default on their other debts. The scheme, announced in last month's budget, will allow travel agents and bus operators to borrow money to speed up the resumption of tourism activities after the pandemic. The government will fully guarantee the loans, and borrowers will be able to repay the debt over a period of up to 10 years, with the option of paying only interest for 12 months. However members of the Legislative Council's panel on economic development expressed concern that businesses wouldn't be in a position to seek loans within the proposed six-month deadline. Frankie Yick, who represents the transport and logistics sector, says the loan scheme is "better than nothing", but a chronic shortage of manpower and the need of businesses to find staff before planning their spending could blunt its effectiveness.  “I'm very worried that the six-month [application period] is not enough... We don't have enough workers in Hong Kong, and there's a serious shortage of drivers," Yick said. "Fixing this problem takes time. If the operators cannot hire drivers, they will not take their buses to repair.” Secretary for Culture, Sports and Tourism Kevin Yeung said he felt the six month deadline was sufficient given the 10-year repayment period. However, he said officials would consider a more flexible deadline.  "We still need to discuss with the Transport and Logistics Bureau because they also have a similar scheme to support the cross-border transport sector as well," Yeung said. Yick said another concern was that the loans excluded any business that had outstanding defaults going back 60 days, noting that many businesses in the sector had experienced chronic cash flow worries during the pandemic.  "People in the sector have had no income for a few years. They may have bank loans... they may be a couple of months in arrears in their payments," Yick said. Yeung emphasised that the lenders involved in the scheme would consider the circumstances of each applicant on a case-by-case basis. However he noted that the general principle is about repayment. "If the debt is outstanding for more than 60 days and it's not repaid, then this person is ineligible... It's the repayment that matters," Yeung said. Under the scheme, travel agencies that had 50 or more employees as of March 31, 2020 will be able to borrow up to HK$5 million, with lower sums available for smaller agencies. Bus operators will be able to borrow HK$100,000 per vehicle.