Hong Kong’s COVID-19 relief measures may leave “little Fintech guys” behind

Financial aid for the pandemic may not be providing help where it’s really needed for the IT sector, but direct funds are still crucial.

Photo: IT lawmaker Charles Mok made five policy proposals for government relief measures.

Last week, IT lawmaker Mr Charles Mok made five policy proposals for the government to consider that would bring more support to start-ups and SMEs amid the COVID-19 crisis.

Mr Mok made these suggestions in light of the pandemic relief measures the government announced. He encourages more action undertaken to subsidise high rental and operation costs. 

“The government must take precautionary measures to back up our innovation and technology industries before the economic downturn hits our local companies and startups, and not wait until the negative impacts emerge,” the lawmaker said.

In addition, he has pushed for the inclusion of the Information and Communication Technologies (ICT) sector in the Anti-epidemic Fund as well as a HK$1 billion rent and salary subsidy for SMEs.

“Mok’s proposal has rightly identified a key issue that most start-ups are undergoing right now, liquidity to stay alive,” said Mr Joshua Chu, ONC Lawyers’ Consultant specialising in Technology Law.

That being said, he notes that these proposals are still “relatively grounded” in a traditional mindset where much of the subsidies will largely benefit banks and not the “little FinTech guys”, as financial institutions are the ones making money off of loans.

Mr Chu posits that offering a grace period would ameliorate some troubles for startups and SMEs:

“If we aim at financial institutions and ask them not to collect on debts during these difficult times, we solve a lot of problems these start-ups are experiencing.”

Other measures he suggested include the suspension of debt collection against tech start-ups and the suspension of bonus pay for top management.

Mr Aaron Sin, speaker and evangelist in the HK startup community, says that this strategy would not necessarily be effective for all startups.

“Not all startups rely on a loan to develop their solutions. Some of the talents and startups are developing codes, or algorithms, and waiting to be recognized by large corporations or institutes.” 

While these startups could be bearing debts, Mr Sin notes, they would appreciate direct funds to further support them in the technology or business development process.

IT lawmaker Charles Mok

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Jasmine Lee

Jasmine Lee

Jasmine Lee is writer, commentator, and journalist. She graduated from McGill University where she took numerous opportunities to study and work around the world. Her specific areas of interest include media studies and human rights.
Jasmine Lee
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Jasmine Lee is writer, commentator, and journalist. She graduated from McGill University where she took numerous opportunities to study and work around the world. Her specific areas of interest include media studies and human rights.