Hong Kong taxpayers may be liable for nearly HK$28 billion in defaulted loans from a government-backed SME financing scheme designed to mitigate Covid-pandemic impacts. Official data revealed that over 19% of the approved applications have defaulted, placing a significant financial burden on the tax base.

Hong Kong taxpayers may have to shoulder nearly HK$28 billion (US$3.57 billion) in bad loans from a now-defunct, fully government-backed financing scheme designed to help smaller enterprises survive the Covid pandemic. Official data released to legislators showed that of the 67,189 loan applications approved under the special scheme, 13,231 had defaulted by the end of February, involving a total sum of HK$27.8 billion. This translates to a default rate of 19.3 per cent. As guarantor, the...