Hong Kong to expand IP-backed lending pilot after seven successful cases

Hong Kong authorities plan to expand an intellectual-property financing sandbox after seven companies completed successful pilot cases, the South China Morning Post reported. The trial lasted nine months and involved the Commerce and Economic Development Bureau, the Intellectual Property Department and the Hong Kong Monetary Authority. The participating companies came from the electronics, construction, toy manufacturing and medical-device sectors.

Loan amounts in the seven cases ranged from HK$1 million to HK$39 million. The scheme allows banks to consider intellectual-property valuations when assessing a company’s development prospects, repayment capacity and collateral. Carmen Chu Lap-kiu, the monetary authority’s executive director of banking supervision, said the businesses obtained larger loans at lower interest rates after their IP assets were taken into account.

She said loan amounts increased by 25% to 50% in the successful cases, while interest rates fell by 25 to 150 basis points. Bank of China, HSBC and Standard Chartered Hong Kong participated in the pilot. Ms.

Chu said banks were processing additional cases, but authorities had not set a fixed timetable or numerical target for expanding participation. Helen Chung Chi-ching, deputy secretary for commerce and economic development, said the scheme addressed difficulties faced by companies with valuable IP but limited physical collateral. Officials hope to gather more examples across different industries before deciding how to develop the next phase.

Authorities also launched a two-year Pilot Patent Valuation Support Scheme. Through the Hong Kong Technology and Innovation Support Centre, it will provide one-off matching grants of up to HK$80,000 to small and medium-sized enterprises commissioning qualified valuations of patents and other IP assets.