Hong Kong Extends SME Financing Guarantee Scheme - Bold Move Amid Economic Turbulence

Hong Kong throws struggling small businesses a lifeline—extending its financing guarantee scheme as economic headwinds intensify.

Government Backstop Expands

The move signals deepening concern over liquidity crunches hitting the city's SME sector. Traditional lenders remain skittish—forcing public intervention to keep capital flowing.

Finance veterans smirk—yet another state-backed patch for a private sector that still can't properly assess risk. Because nothing says 'healthy market' like perpetual government guarantees.

Watch this space: if corporate defaults spike anyway, even this extended safety net might not hold.

The Hong Kong Monetary Authority (HKMA) has announced significant changes to the SME Financing Guarantee Scheme (SFGS), a MOVE aimed at bolstering the economic support available to small and medium-sized enterprises (SMEs) in the region. According to the HKMA, the application period for the 80% Guarantee Product under the SFGS will be extended by two years, now running until the end of March 2028.

Increased Loan Guarantee Commitment

In a bid to enhance financial aid to SMEs, the total loan guarantee commitment under the SFGS will be increased by HK$20 billion, bringing the total to HK$310 billion. This expansion reflects the Hong Kong government's commitment to supporting businesses in navigating the challenging economic landscape.

Extended Principal Moratorium

The principal moratorium arrangement, which was initially set to expire on 17 November 2025, will also see an extension until 17 November 2026. This adjustment will allow eligible enterprises to apply for a principal moratorium period of up to 12 months, either before or after 17 November 2025, effectively offering a total moratorium period of up to 24 months.

For loans drawn down on or after 18 November 2025, eligible businesses can apply for a moratorium period of up to 12 months, provided they apply on or before 17 November 2026. This measure is expected to provide much-needed relief to SMEs, allowing them to focus on business operations without the immediate pressure of loan repayments.

Implementation and Next Steps

HKMC Insurance Limited, a subsidiary of the Hong Kong Mortgage Corporation, will coordinate with participating lenders to implement these new measures. From 1 November 2025, borrowing enterprises are encouraged to contact their lenders to discuss specific arrangements and how they can benefit from the extended scheme.

These measures come at a critical time as the global economy faces uncertainties, and Hong Kong's government continues to seek ways to stabilize and support its business community. The extension of the SFGS is a strategic move to ensure that SMEs, which are crucial to the region's economic health, receive the necessary support to thrive.

For more details, please visit the Hong Kong Monetary Authority.

• hong kong
• sme financing
• economic policy