Dedicated 100% Loan Guarantee Schemes for Travel and Cross-boundary Passenger Transport Trades

Banking Policy Department Our Ref: B1/15C, B9/25/2C, B9/25/4C B9/75C, B9/188C 25 April 2023 The Chief Executive All Authorized Institutions Dear Sir/Madam, Dedicated 100% Loan Guarantee Schemes for Travel and Cross-boundary Passenger Transport Trades Pursuant to the full resumption of normal travel between the Mainland and Hong Kong from 6 February 2023, the cross-boundary passenger transport between the two places has gradually resumed, and the operating conditions of inbound and outbound tourism markets are gradually recovering. To support the business resumption of the cross-boundary passenger transport and travel trades, the Financial Secretary announced in the 2023-24 Budget the proposal of launching dedicated 100% loan guarantee schemes (DLGS), with reference to the SME Financing Guarantee Scheme, to provide fully guaranteed loans to eligible passenger transport operators / registered owners and licensed travel agents. The DLGS will be administered by HKMC Insurance Limited (HKMCI), a wholly owned subsidiary of The Hong Kong Mortgage Corporation Limited (HKMC). Under the DLGS, the HKMCI will rely on the professional expertise, judgement and care of participating authorized institutions in conducting customer due diligence and verification of applicants’ eligibility for the loans. After loan drawdowns, the HKMC will purchase the loans without recourse, and such obligation will be backed by the Government. The Government has issued a letter of comfort to the Monetary Authority confirming its commitment under the DLGS.

2 I am writing to confirm that the regulatory and reporting treatments, and our expectations on credit assessment and approval etc., in respect of eligible loans granted by participating authorized institutions under the DLGS will follow those set out in our circular letter of 20 April 2021 in respect of eligible loans granted by institutions under the 100% Personal Loan Guarantee Scheme. A copy of the letter is attached at Annex for ease of reference. Yours faithfully, Martin Sprenger for Monetary Authority Encl cc: TLB (Attn: Mr Percy Leung) CSTB (Attn: Ms Trinky Chan) HKMC (Attn: Mr Clement Chan)