Development Fund loans pondered

The committee supervising the Cabinet's Development Fund may plan NT$2 billion in emergency loans to bail out small and medium-sized companies after severe acute respiratory syndrome (SARS) curbed consumer spending and tourist arrivals, a fund official told the Taipei Times yesterday.

"We are still in the planning stage and haven't finalized the plan yet," said Liu Po-hung (劉柏宏), a fund section chief.

"But it's for sure that we are working in that direction," Liu said.

The worldwide spread of SARS could hamper the nation's commercial activities by an estimated NT$33.4 billion (US$968 million) in the second quarter, as people stay home to avoid exposure to the virus, the Ministry of Economic Affairs estimated on Monday.

The loan plan, if passed by the committee over the next few days, will help keep afloat travel agencies, hotels, transport firms and retailers which have been hard hit by the disease, Liu said.

He dismissed a local newspaper report that companies affected by SARS will get loans of as much as NT$15 million each, saying the proposal is still under discussion.

However, another fund official, who preferred to remain anonymous, criticized the proposed loan plan as lacking direction.

"What they want is just to get money [from us]," the official said.

"But they don't tell us how many companies are qualified to apply for the loans and the maximum loan they each can receive," the official said.

The official said the Cabinet needs to sit down with local bankers and hash out the details of the plan before implementing it.

Throughout the day yesterday, officials at the ministry were busy holding meetings to develop measures to reduce the short-term impact of SARS on the domestic economy.

According to Liu Kuo-chun (劉國鈞), a section chief at the Small and Medium Enterprise Administration, the ministry is considering offering loan guarantees to the hardest-hit tourism, transport and retail industries.

The ministry is also planning to spend NT$300 million to help exporters secure orders and promote trade, Francis Liang (梁國新), deputy director of the Bureau of Foreign Trade, said.

On Monday, the government announced plans to establish a NT$50 billion emergency fund to tackle the SARS outbreak and allot two-thirds of the money to the SARS-hit tourism and manufacturing sectors. The plan must still win legislative approval.

Day Sheng-tung (戴勝通), president of the National Association of Small and Medium Enterprises (中小企業協會), yesterday welcomed the government's moves, saying he expects small and medium-sized companies with good credit to be able to more readily get the capital they need to operate.

"While the government is seeking ways to help the tourism industry, the government should also pay more attention to companies that have operations in China, if the disease outbreak continues to drag on," Day said.