Actions to make SMEs competitive

The Hong Kong Export Credit Insurance Corp unveiled four new measures to help SMEs to improve competitiveness.

Hong Kong Export Credit Insurance Corporation (ECIC) would offer 5 to 10 per cent discounts on premiums to companies earning HK$10 million in revenue annually. Such companies account for 90 per cent of the corporation's 4,000-odd policyholders.

The annual fee for policyholders is also being waived for a year.

The repercussions of the euro-zone debt crisis and the sluggish US economy prompted 17 per cent more buyers to delay payment on finished goods to Hong Kong exporters in the nine months to December 31.

ECIC’s latest move to introduce the new measures follows Financial Secretary John Tsang’s budget speech on Feb 1 when he revealed that the government will introduce new initiatives to “help SMEs maintain their competitiveness, tap into emerging markets and ease their financial pressure”.

Those initiatives include new terms in the ECIC’s insurance policy to Hong Kong’s small and medium exporters with better risk protection.

In addition, the ECIC has extended its policy cover to include the sales contracts of exporters’ non-wholly owned overseas or mainland subsidiaries. Previously, the overseas or mainland subsidiary must be wholly owned by the policyholder who has absolute control over the subsidiary.

The four new measures are in addition to the three already launched by the ECIC in December last year with a view to helping SMEs reduce costs and maintain competitiveness, namely waiving its policy fee for one year; providing exporters with free buyer credit assessment service; and shortening the processing time of small credit limit applications.

SMEs need to do more to find more business opportunities, such as seeking orders on B2B platforms.