[Archive] Self-employment Business Start-up Fund to be set up by the Employees Retraining Board

Asked by : Ir Dr Hon HO Chung-tai

Replied by : SEM

Question :

It has been reported that the Employees Retraining Board plans to set up a Self-employment Business Start-up Fund in September this year to assist those who intend to start up businesses as self-employed persons in securing loans from banks by offering guarantees for such loans. In this connection, will the Government inform this Council of the eligibility and approving criteria set for the Fund, as well as the requirements for the repayment of loans?

Reply:

Madam President,

The Steering Committee on the Self-employment Business Start-up Fund set up by the Employees Retraining Board (ERB) has taken active steps to prepare for the establishment of the Fund, which is mainly targetted for ERB retrainees, including those who have completed the ERB's full-time/part-time self-employment courses or full-time job specific skill courses and intend to start up businesses.

To enable ERB retrainees to secure loans from banks, the ERB intends to act as guarantor, undertaking up to 70% of the risks involved. The maximum amount of loan in each case is tentatively set at $100,000. While the ERB will set up a vetting panel to screen individual applications and interview applicants, the final lending decision will rest with the banks concerned. The proposed basic screening criteria include:

1. The applicant's self-employment/business start-up plan and the prospect of the industry concerned;
2. The applicant's background and capability, such as his past experience in related industries as well as vocational skills possessed;
3. The financial position of the applicant (e.g. whether he has filed a bankruptcy petition and his financial capability to bear part of the capital for starting up a business.); and
4. Assessment made by the training body which provides retraining for the applicant.