Grim view of many social enterprises

More than one-tenth of social enterprises say they face a 50 percent chance of closing if the unrest continues, according to a survey. The survey of 103 enterprises was conducted last month by the Hong Kong General Chamber of Social Enterprises. It found 79 percent of respondents face...

Jane Cheung

Tuesday, December 03, 2019

More than one-tenth of social enterprises say they face a 50 percent chance of closing if the unrest continues, according to a survey.

The survey of 103 enterprises was conducted last month by the Hong Kong General Chamber of Social Enterprises.

It found 79 percent of respondents face varying degrees of operation loss.

Over 42 percent saw medium-level deficits while 24 percent said their situation was serious.

Social enterprises in the catering industry were the worst affected, as all of them faced deficits. This was followed by 86 percent of the education industry and 78 percent of retailers.

Most affected are those inside MTR stations, which have been closing early, and universities, many of which cut short their semesters after clashes between police and protesters.

Almost 69 percent of surveyed enterprises said the current political and social environment have had a "very negative" impact on their businesses.

More than 80 percent of enterprises said they will suspend expansion plans, 27 percent said they will downsize and 21 percent said they will shorten working hours.

Sixteen percent will close some of its branches and 6 percent will ask staff to take no-pay leave.

Asked how long they can survive if the current unrest continues, 53 percent said they could hold on for one year, while 20 percent said they are surviving on cash flow sufficient to support operations for only three months.

While 60 percent said they have less than a 20 percent chance of closing their business, 11 percent said for them it's 50-50.

"For over a decade, social enterprises have contributed to helping the underprivileged in society," the chamber's secretary Chung Wai-shing said.

"They have supported society in innovative plans to tackle poverty and issues relating to the environment and public education."

The group called for the government to launch relief measures to help enterprises.

The survey also found over 86 percent hoped the government would offer a one-off HK$60,000 subsidy, while 53 percent wanted the government to introduce rent allowances for at least six months.

"We also hope the government will take the lead in using more social enterprise products or services," Chung said. "Social enterprises should be allowed to be classified as small and medium-sized enterprises, which would allow us to be included in SME support schemes."

The chamber's director, Andy Ng Wang-tsang, said the group met representatives from the Labour and Welfare Bureau last month to discuss possible relief measures for social enterprises and a further meeting with Chief Secretary for Administration Matthew Cheung Kin-chung will be arranged soon.

jane.cheung@singtaonewscorp.com