Special mention to freelancers as loan scheme details bared

Freelancers who lost their main income can apply for an HK$80,000 special loan for the unemployed, but workers on no-pay leave cannot, according to details of the widely leaked HK$15 billion Special 100 percent Loan Guarantee for Individuals Scheme.

"We acknowledge that under this prolonged economic recession, many people have suffered badly," Paul Chan said. "Some of them might want to have more options in order to tide themselves over, so the personal loan is meant for that purpose."

The maximum loan amount per applicant is HK$80,000 or six times their average monthly income during employment.

They can repay only the principal in the first year. Afterward, the principal and interest can be repaid over up to five years with an interest rate fixed at 1 percent per annum.

The application period will last for only six months and the scheme is also open to freelancers who can provide proof of loss of income.

"Applicants who have repaid loans in full as scheduled will be offered full reimbursement for the interest paid," Chan said.

Candidates must be employed for at least three months between January last year to this month, sources said. They must be unemployed for at least two months when applying.

Workers on no-pay-leave are not eligible as the term "unemployed" is defined as losing a job or main income source.

"When applying for the scheme, the borrower must sign an unemployment declaration and show relevant documents," sources added.

It will be launched in April at the earliest, with more than 180,000 estimated to benefit.

To safeguard employment, Chan said there are plans to create 30,000 time-limited jobs for a period of up to 12 months with a HK$6.6 billion funding injection.

The government has created about 31,000 time-limited jobs in the public and private sectors through the anti-epidemic fund since last year, with about 16,000 of them filled as of the end of last month.

Half of the jobs that have been created are within the government, including technical, cleansing, anti-mosquito, administrative and professional positions and the other half from nongovernment sectors such as engineering, architecture, surveying and town planning.

Pro-establishment and pro-democracy parties slammed the budget for failing to provide sufficient support to the unemployed.

DAB chair Starry Lee Wai-king said it is disappointing that the government rejected to disburse unemployment assistance funds.

Oxfam Hong Kong director general Kalina Tsang Ka-wai warned: "If unemployed grassroots residents can only borrow money to survive, with continuous insufficient income, they might fall into financial difficulties and debt crisis."

Tsang said the government is irresponsible.

The Federation of Hong Kong and Kowloon Labour Unions said the government should offer a more flexible repayment period and a subsidy for companies to recruit more people.

maisy.mok@singtaonewscorp.com