A total of 261 small and medium enterprises (SMEs) which benefited from government support measures have already closed their doors due to bankruptcy. Of these shutdowns, 80 were recorded in just the first three months of 2022, the Economic and Technological Development Bureau (DSEDT) said in reply to an enquiry from media outlet Plataforma.
According to the report, 181 companies from a total of 8,354 which benefited from the SME Aid Scheme, one of the most popular support programs, have already gone bankrupt, representing 2.7% of the total number of approved enterprises.
The DSEDT explained that this number might further increase as, under the scheme, beneficiary companies only need to start repaying their loans 18 months after receiving a payment. Payments made under the scheme are up to 600,000 patacas, interest-free, with repayments to be made over a period of up to eight years.
Additionally, 5,063 SMEs have applied for a different support plan, which includes subsidized interest of up to 4% for a maximum of three years on loans up to 2 million patacas.
DSEDT said that a total of 80 companies which accessed this scheme have already closed their doors, as of end March this year, with another four having their support plans canceled for being unable to repay their loans.
Statistics show that from 2020 until March this year, DSEDT approved a total of 18,541 requests of the almost 21,000 received for the three major SME support plans offered by the government.
The measures represent a total investment of 8.7 billion patacas, of which 2.25 billion patacas comes from direct loans from the government and 6.15 billion patacas are related to loans issued by banks. The remaining amount, over 300,000 patacas, is related to adjustments of the reimbursement scheme launched by the government in an attempt to facilitate the repayment of loans previously granted.
call for border
reopening with HK
Taking into account the current business environment, local business and commerce associations have pointed out that reinstating quarantine-free travel with the neighboring region of Hong Kong as soon as possible will ease local companies’ burden, saying that this will relieve some of the pressure on local SMEs.
To Plataforma, Melinda Chan, vice president of the Federal General Commercial Association of Macau Small and Medium Enterprises said that, according to a survey by the association, almost one-third of local SMEs have dismissed workers due to Covid-19 pandemic impacts, while some 10% are thinking of permanently closing their doors.
“SMEs are very pessimistic about the future. Macau is in recession and the crisis is spreading to several areas,” Chan said, noting that the impact on local companies is “huge,” as the large majority of local SMEs emerged out of the “prosperity of the tourist sector,” being extremely reliant on tourism.
Noting that there are no positive signs from authorities on the reopening of Macau to foreigners, tourists from the mainland will continue to be the only visitors.
“Macau cannot survive just on internal demand. A population below 700,000 cannot sustain the existing economy,” Chan said, adding that “the tourism and the gaming industry are the main engines of the economy. If these industries enter a decline, the expectation [is that] SMEs will fall apart, as happened with many small businesses in NAPE area.”
“The tourists liked to go to local restaurants and eateries to taste the local food but now [even if they return] most of these businesses were forced to close,” she concluded, noting that if the status quo continues, soon hotels will be closing down too.
In the same report, Lei Cheok Kuan, president of the Industry and Commerce Federation of Macau Central and Southern District also remarked that the fastest and most sustainable solution, for the time being, is to reopen the border with Hong Kong.
“The number of cases of infections should drop [soon] to two digits. This should be a great time for the [Macau and HK] governments to negotiate a way to ease the border restrictions,” Lei said, suggesting that the vaccine passport in use in Hong Kong could be recognized in Macau as an entry requirement.
He also expressed hope that people on the mainland who are outside of risky areas could be allowed to enter Macau.
Asked about the debts accumulated by SMEs, Lei said that the association has already addressed the issue with the government.
According to the response received, an authorization from the Monetary Authority of Macao (AMCM) is needed to enforce any added relief measures for repayments, adding that the association hopes the government can communicate with AMCM to find a solution.
