The SAR government’s Executive Council has concluded its revisions to assistance programs in a bid to provide continued support for beneficiary enterprises and young entrepreneurs who are still facing operational difficulties in the uneven economic recovery following the Covid-19 pandemic.
During the pandemic, temporary measures were introduced to support beneficiary enterprises overcome difficulties.
In a press conference Friday, ExCo spokesperson and Secretary for Administration and Justice André Cheong said the SAR government provided repayable services to small and medium-sized enterprises and entrepreneurial young people in need through the “Small and Medium Enterprise Assistance Program” and the “Youth Entrepreneurship Assistance Program.”
The objective was to support the enterprises to improve their operating conditions and cope with financial difficulties, and to encourage and support young people to start their own businesses, he said.
However, following the pandemic and uneven economic recovery, business operations will still be difficult.
Therefore, the ExCo has drafted changes that include the extension of the maximum repayment period for both programs from eight to 10 years, as well as the automatic two-year extension of the repayment period for enterprises currently under the programs, by amending Administrative Regulation No. 9/2003 and Administrative Regulation No. 12/2013.
These measures are intended to alleviate the loan repayment pressure on small and medium-sized enterprises as well as young entrepreneurs, allowing them more time to stabilize their operations and financial situations, said Cheong.
Regulations take effect from the day after they are promulgated.
Tai Kin Yip, the director of the Economic and Technological Development Bureau (DSEDT), said there are currently approximately 12,000 small and medium-sized enterprises and young entrepreneurial enterprises still in the interest-free loan repayment period who are beneficiaries of this measure.
Due to the two-year extension of the repayment period, the bureau was originally expected to receive MOP500 million in repayment income this year.
Now it will receive MOP200 million less in repayments, which means it is expected to collect MOP300 million in repayments this year. Repayments collected next year are also expected to decrease.
EXTENSION TO RESTORE MARKET CONFIDENCE
Frederico Ma Chi Ngai, President of the Macao Youth Association and vice president of China Youth Entrepreneurs Association, is in favor of extending the repayment period by two years for the two assistance programs for small and medium-sized enterprises and youth entrepreneurship.
He is confident the government will carefully consider the views of various sectors of society, including the business community and members of the Legislative Assembly. Acting promptly on this matter will have a positive impact on stabilizing society and boosting corporate confidence in the market, he said.
Ma said the current economic recovery is uneven, with residents displaying cautious consumption behavior. Additionally, there is increased pressure on industrial and commercial operations, particularly for businesses in the northern district, who are facing significant challenges.
Lynzy Valles & Howard Tong
‘TEMPORARY SOLUTION TO PROVIDE RELIEF’
The extension of the repayment period for the assistance programs from eight years to 10 years will only provide a “temporary relief” to local SMEs.
Although the extension is anticipated to benefit around 12,000 local small and medium-sized enterprises, associations view these measures as a temporary solution to provide relief to struggling businesses facing repayment pressures.
For sustainable growth, business chambers said the government must adopt a comprehensive approach to attract individuals to the community and stimulate the local economy.
Wong Kin Chong, president of the Industry and Commerce Association of Macau Northern District remarked that while the current two-year repayment period under the assistance programs provides temporary relief, the “interest-only repayment” scheme is set to conclude by year-end.
The business chamber has urged the government to consider extending these measures to provide enterprises with more breathing room.
“In addition to delaying the repayment period to help small and medium-sized enterprises with capital turnover, the government must also take a multi-pronged approach to revitalize the community economy,” the president told local media outlet Macao Daily.
Although some landlords are willing to reduce rents, it is difficult to reduce labor costs, and most catering industries also must bear the cost of food delivery platforms.
Therefore, many companies have chosen to shut down their business due to “unsatisfactory performance” and uncertain business prospects.
The current two-year repayment period for the two assistance programs is believed to be a “relief” for small and medium-sized enterprises that have applied for assistance. However, the “interest-only repayment” measure will end at the end of the year.
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