LCQ2: Support for micro, little and medium-sized business
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Following is a concern by the Hon Shiu Ka-fai and a reply by the Under Secretary for Commerce and Economic Development, Dr Bernard Chan, in the Legislative Council today (May 6):
Concern:
Rather a variety of micro, little and medium-sized business (MSMEs) have actually mentioned that federal government financing plans are essential to their capital, and these moneying plans have an even higher effect on their operations, especially throughout the present duration of financial change. Some members of the market have actually mentioned that there have actually been hold-ups in the vetting and approval procedure of the SME Export Marketing Fund (EMF), with the waiting time of particular cases surpassing the authorities’ service efficiency indications. The Dedicated Fund on Branding, Upgrading and Domestic Sales (BUD Fund) carried out improvement steps in March in 2015, consisting of making changes to the matching ratio and preliminary payment, and so on, all of which have actually impacted the capital of MSMEs. In this connection, will the Government notify this Council:
(1) of the preparation in between the Trade and Industry Department’s invoice of all needed documents from the candidates of the EMF and the dispensation of moneying assistance in each of the previous 3 years, with a tabulated breakdown of the variety of applications by preparation (i.e. (i) within 30 clear working days, (ii) after 30 clear working days however within 9 months, and (iii) more than 9 months);
(2) whether it has actually determined if the applications discussed in (1) have actually experienced hold-ups in the vetting and approval procedure; if so, of the information; and
(3) considered that the improvement procedures for the BUD Fund have been carried out for more than a year, how the authorities evaluate their influence on the operation of MSMEs, and when an evaluation will be performed?
Reply:
President,
The Government has actually been embracing a multi-pronged method in promoting varied advancement of little and medium business (SMEs). Amongst which, the SME Export Marketing Fund (EMF) and the Dedicated Fund on Branding, Upgrading and Domestic Sales (BUD Fund) supply financing assistance with a view to motivating business to broaden their markets outside Hong Kong by taking part in export promo activities and updating and change respectively. As one of the steps attending to the COVID-19 pandemic, the EMF has actually been executing the unique steps from end-April 2021 to end-June 2026 to cover exhibits targeting the regional market and online exhibits, along with unwinding the eligibility requirements to cover non-SMEs. Considering that 2018, the Government has actually likewise introduced numerous rounds of improvements to the BUD Fund, consisting of the injection of an overall of $7.75 billion, growth of the geographical scope, phased boost of the cumulative financing ceiling per business from $500,000 to $7 million, and the launch of “Easy BUD” and “E-commerce Easy”and so on.
The combined reply to the 3 parts of the concern is as follows:
Under regular scenarios, the Trade and Industry Department (TID) will finish the processing of a legitimate EMF application within 30 clear working days from the date of invoice of the properly finished application accompanied by all needed paperwork, and the processing time might take longer for complex cases. Complex cases typically include applications which are believed to be non-compliant with the financing requirements or conditions. The processing time of private complex case differs according to elements consisting of whether the candidate can offer all essential paperwork in a prompt way, the general variety of applications, case information and the intricacy of the case, and so on.
For basic applications, the EMF has actually had the ability to satisfy its efficiency promise of finishing the processing within 30 clear working days from the date of invoice of the appropriately finished application accompanied by all essential documents in the previous 3 years. Complex cases which take longer processing time represented about 30 percent of overall variety of applications in the previous 3 years. Total speaking, the processing of over 99 percent of applications was finished within 9 months after the invoice of all required documents. Comprehensive breakdown of the numbers is at Annex.
In the last few years, the variety of complex cases has actually increased. Appropriate cases primarily include candidate business which have actually consisted of reimbursed payments by organisers or their associated celebrations in the stated quantity of real expense, in order to acquire greater grant quantity than they are entitled to. We have actually likewise discovered that the organisers and exhibitors of some promo activities might have left out or misrepresented info, or perhaps made incorrect statements. All applications for pertinent activities are subject to additional evaluation, thus needing a longer processing time to guarantee correct usage of public funds.
The TID has actually been keeping close intermediary with the market and candidate business and continuing to designate workforce in a prompt way to procedure applications, improve the workflow of dealing with applications and computer system functions, improve processing treatments, revamp the EMF website layout style, and so on, with a view to improving the processing of EMF applications. For complex cases presumed to be non-compliant with financing requirements and conditions that need longer processing time, the TID has actually supplied even more assistance by means of the EMF Guide to Application and application, helping candidate business in stating honestly all the appropriate expenses of the activities and the associated info. The TID has actually advised the organisers by means of the Guide to note out the information of refunds in files of the activities to help with statement by candidate business. We have actually likewise stepped up promotion through numerous channels, consisting of the EMF web page, notifications of the EMF, e-newsletters of the Support and Consultation Centre for Small and Medium Enterprises, and so on, to enhance deterrence versus the appropriate non-compliant or unlawful acts.
On the other hand, the Government carried out rationalisation procedures under the BUD Fund considering that March 2025 with a view to making use of the fund in the most efficient way while guaranteeing its monetary sustainability. In 2025, the BUD Fund got around 5 350 applications, a boost of over 210 percent as compared to the variety of applications in 2019; the overall authorized financing quantity increased by over 320 percent throughout the very same duration, showing that the trade’s need for the BUD Fund has actually stayed strong. The getting involved business concurred that the BUD Fund had actually assisted them in different locations, consisting of improving business image, brands/products/services awareness, and their general competitiveness, and so on. As at end-March 2026, around 98 percent of the business that reacted to the job conclusion studies thought about that the BUD Fund worked in supporting their organization advancement. Around 98 percent of the business that reacted to the yearly tracking studies thought about that the BUD Fund worked to their long-lasting advancement.
In March 2025, the Government has actually likewise presented improvement procedures under the BUD Fund, consisting of relaxation of the frequency for “Easy BUD” submissions and arrangement of more targeted financing assistance for jobs including green change and restructuring of assembly line, and so on. In addition, the Government prepares to execute a series of procedures revealed in the 2025 Policy Address and the 2026-27 Budget in the 2nd quarter of 2026, consisting of growth of the geographical scope of the BUD Fund, boost of the financing ceiling per “Easy BUD” application from $100,000 to $150,000, in addition to the arrangement of more targeted financing assistance for business to carry out tasks which include expert system components, and so on. We require time to examine the monetary ramifications in regard of numerous steps. We will continue to handle the fund wisely with a view to allowing more business to get financing assistance and keeping a large protection of recipients while guaranteeing the monetary sustainability of the BUD Fund. The Government will continue to keep in close touch with the trade, continuously examine the operation of the financing plan, and make changes and improvements when required.