Where’s the love?

The government’s total lending to local small and medium-sized enterprises and young entrepreneurs was slashed by 95 per cent in April due to the sharp decrease in the authorities’ approval of loan applications. According to the latest data released yesterday by the Macao Economic Services (DSE), the government’s approved loans to these two categories of applicants only amounted to some MOP1.4 million (US$175,000) in total, a drastic fall of MOP26.6 million from the MOP28 million lent in March. Of the total, MOP1.2 million was borrowed by two local firms via the SME Aid Scheme – compared to the 41 approved applicants whose loans totalled MOP16.7 million under the same scheme in March. This SME-support scheme received 64 new applications for loans last month, while the government officially declined one other application in the same month. This SME Aid Scheme, implemented since May 2003, provides interest-free loans of up to MOP600,000 per applicant for the purchase of equipment, renovation, advertising and other uses. Businesses have up to eight years to repay the loans. This scheme loaned nearly MOP57 million to 226 small and medium-sized firms in the first four months of this year. In terms of sector, some 32.6 per cent of the total went to companies engaged in the retail industry, amounting to MOP18.6 million. Real estate companies received loans of some MOP9.4 million, which accounted for 16.4 per cent of the total. Meanwhile, the other SME support scheme hosted by the economic department – the SME Credit Guarantee Scheme – did not approve any new loans last month. Loans to young start-ups drop A significant fall was also apparent in the government’s approval of loans to young start-ups via the Young Entrepreneurs Aid Scheme, which offers interest-free loans of up to MOP300,000 to local young people to start their own business. The scheme granted some MOP200,000 to one successful applicant last month, compared to MOP9.3 million to 38 young entrepreneurs in March. For the first four months of this year, the young start-up scheme approved total loans of MOP20.8 million to 88 beneficiaries. In particular, those running retail businesses accounted for 32.6 per cent, followed by those operating hotels and F&B establishments, which amounted to MOP6.8 million and MOP4.7 million, respectively.