Last week, the Macau SAR Government announced it is expanding the credit line to Small and Medium Enterprises (SMEs) under two supporting schemes it established in 2003. The new text of the SME Aid Scheme entitles small business that have arranged a MOP300,000 interest-free loan allowed under the scheme, to request a second loan of the same value, with the total amount of subsidy contracted by a company not exceeding MOP600,000.
Under the second scheme altered last week, the SME Credit Guarantee Scheme, the cap amount for collateral under the scheme was raised to MOP4.90 million, while bank loans to companies were kept at 70 per cent, representing an increase from MOP5 million to MOP7 million.
“I always believed that MOP300,000 to start a business today is little, so it is good that the government is expanding the support,” said Jorge Valente, Vice-President of the Youth Entrepreneurs Association.
Members of the Association, involved on an individual basis, are engaged in several business segments including logistics, events, real estate, restaurants and information technology.
“Costs are too high, with rents. Not to mention staff. Even if they are expensive, there is no staff to hire. I think that the government is increasing access to credit because it is much more difficult for companies in Macau [compared to Hong Kong and Mainland China] to succeed in getting credit by other means.”
The young entrepreneur also believes that giving a second chance to healthy companies that want to stay in business is a good way to encourage the sector.
“Only those that will survive will continue to the second phase, as I understand it. And the opportunity for a second support to a business that is surviving, is good, because at the end of two years, we may be in need to do some recap,” he commented.
According to the new amendment to the SME Aid Scheme, only companies that have repaid the first loan in the terms of the agreement, and which are not in debt to the government, can apply for the second MOP300,000-subsidy.
There is labour and labour
Although more credit works to the benefit of SMEs, another hindrance lies in the path to success for small and medium entrepreneurs – hiring skilled staff.
“I don’t think that the laws are well done today to adapt to different business segments. The laws that prevail for Blue Card workers were made at a time to serve recruiting construction workers, and they were kept that way. We don’t even need too many workers, but to be able to choose them,” claims Valente Júnior.
The solution? Striking a balance between bureaucratic procedural time and criteria required, he says.
“Despite the fact that there is a differentiation today between qualified and non-qualified Blue Card holders, the truth is, this differentiation does not apply easily to what we, the SMEs, need. If I need a programmer with ten years of experience, I don’t need someone with a PhD. What I need is that he is able to do coding. Today, I cannot hire this person, because the government will say that this person is not qualified. It is too disconnected from reality,” he opines.