Hong Kong has been ramping up efforts to support small and medium-sized enterprises (SMEs) as an engine for economic recovery by helping them tide over challenges such as insufficient liquidity, market development and business promotion, officials said at a forum on Monday.

Describing SMEs as a bedrock of Hong Kong’s economy, Secretary for Commerce and Economic Development Algernon Yau Ying-wah said supporting these enterprises is one of the government’s critical areas , especially in helping them to cope with difficulties and enhance their competitiveness.

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Since 2012, the Hong Kong government has been providing credit guarantees through the SME Financing Guarantee Scheme to help SMEs secure commercial loans

He made the remarks at the BPA Forum on Economic Development and SME Support, staged by the Business and Professionals Alliance for Hong Kong. 

Data from the Commerce and Economic Development Bureau show that SMEs account for more than 98 percent of enterprises and employ around 45 percent of the private sector workforce in the city.

Since 2012, the Hong Kong government has been providing credit guarantees through the SME Financing Guarantee Scheme to help SMEs secure commercial loans.

As of the end of March, more than HK$270 billion ($34.5 billion) in loans have been approved under the program, benefiting nearly 62,000 enterprises and 780,000 employees, and alleviating the problems of closure and redundancy amid the outbreak of the COVID-19 pandemic, according to Yau.

Other measures include the Dedicated Fund on Branding, Upgrading and Domestic Sales to assist SMEs enhancing their competitiveness and developing diversified markets.

Addressing the same event, Hong Kong Monetary Authority Chief Executive Eddie Yue Wai-man said many sectors in the city need support for upgrading and restructuring given changes in tourists’ consumption patterns.

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The city’s de facto central bank and the Banking Sector SME Lending Coordination Mechanism in March unveiled nine initiatives to give SMEs a leg-up, benefiting more than 3,000 enterprises, of which 1,100 companies were provided with credit support by banks, involving more than HK$4 billion, according to Yue.

Lawmaker Lo Wai-kwok of the Business and Professionals Alliance cited an unofficial estimate, saying a positive message for Hong Kong’s economy is that visitors during the May Day Golden Week brought in HK$2 billion in revenue.

He said SMEs should take liquidity issues seriously and work hard to survive slow economic recovery.