Under the scheme, which is known as Green Equipment Financing, businesses that acquire environmentally-friendly equipment which is deployed in Hong Kong or China can apply for loans with an interest rebate and a principal repayment moratorium.
Machines eligible for the loans can be energy-saving, water-saving, fuel-saving, noise-reducing, waste-minimising, production materials consumption efficient, or air, land or water pollution-minimising. The Business Environment Council, a regional network partner of the World Business Council for Sustainable Development, will review applications to make sure loans will only be granted to the machines which fulfil one of the environmental protection criteria.
The scheme is available to businesses which are making minimum borrowings of HK$500,000, and the interest rebate is applicable to the first HK$10 million of the loan amount. A two-month interest rebate is applicable where a loan tenor is 36-months or longer, while a loan tenor of between 18-months and 35-months will be rewarded with one-month interest rebate. Businesses with tenors of 18-month or above can also enjoy an initial six-month loan principal repayment holiday.
The bank also pledges that it will commit to a greener environment together with its customers, by making a HK$1 donation to WWF Hong Kong for every HK$2,000 of the loan amount.
ôThe bank hopes that the move will arouse concerns among companies to environmental protection issues,ö says Nixon Chan, HSBCÆs senior executive of commercial banking (small and medium enterprises business).
Apart from merely contributing to the environment, the bank also sees it as a good opportunity to poach more customers.
ôWe see huge potential in equipment financing with ChinaÆs rapidly developing economy. For the first half of 2007, the total loan amount for machinery was HK$6.7 billion, of which 90% was used in the Mainland,ö says Margaret Leung, the bankÆs group general manager and global co-head commercial banking.
Banks have recently started to launch products with an eco-concept. In June, JPMorgan launched an environment, social and governance equity research product for Asia. The research focused on providing a systematic analysis of the potential impact of ESG issues to the bottom line of companies along with in-depth discussions of how companies in the region are positioned to deal with these issues. According to the bank, the equity research was a response to the increasing needs of fund managers seeking to integrate environmental factors into their investment decision making.
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