Unemployment loan hard to save grassroots survey: more than 80% of unemployed households do not want to apply for debt repayment

The new coronavirus is raging, Hong Kong's economy is suffering, and the unemployment rate remains high.

The Hong Kong government earlier launched the "100% Guaranteed Personal Preferential Loan Scheme" to provide capital turnover for the unemployed, but it was questioned that it was ineffective.

A survey by a concern group found that unemployed or underemployed families reacted indifferently to the government's unemployment loan program. Only 1.8% of the unemployed respondents said they had applied for the program. Most of them faced financial difficulties and did not consider borrowing easily.

Ms. Wang was the first batch of applicants for the loan program. She described the application procedures as complicated and it took about three months to get approved. While waiting for the approval, Ms. Wang lived in a tight life.

She said that she deeply felt that the loan plan had not been able to solve the urgent need, and she even had to worry about repayment in the future.

From June to July this year, the Catholic Labour Affairs Commission of Hong Kong visited 113 families who were unemployed or underemployed due to the epidemic to understand their economic and employment status and their willingness to apply for the government's "100% Guaranteed Personal Loan Program".

The survey results showed that nearly 80% of the respondents did not want to apply for unemployment loans, 62.1% of the respondents indicated that they "do not want to borrow money", 36.8% of the respondents "worried about lack of stable income or job debt repayment", and 24.1% of the respondents "There are still savings to live on," and 24.1% of the respondents worry that borrowing "will increase the economic burden in the future."

Even if an unemployed family intends to borrow money to tide over the difficulties, the borrowing process is still complicated. For example, the applicant needs to provide proof of past income, unemployment certificate, and bank account certificate in the past three months.

In addition, the approval time was long, and the difficulties were not relieved in time.

The bank has repeatedly requested to submit documents and the application progress has been blocked

Ms. Wang was unemployed in early February 2021, and her savings have been exhausted, and she has to borrow money from friends to survive.

When the government launched the unemployment loan program, it immediately applied for it.

During the application period, Miss Wang kept receiving notifications from the bank to make up the documents. She had made up all the documents on June 24 this year, but the loan was not approved until mid-July.

She has repeatedly questioned the results of the application to no avail, and there is no other channel to follow up, and there is no way to ask for help.

A survey by the Catholic Labour Affairs Commission found that in the face of unemployment and underemployment, the economy of the interviewed families is deteriorating, and most of the interviewed cases need to cut back on food and clothing.

(Photo by Huang Huishan)

Due to her short working years, Miss Wang was retrenched without severance pay. She was in a difficult life but she did not want to apply for CSSA.

She hopes that the government will establish short-term unemployment assistance and a long-term unemployment insurance system to at least allow the unemployed to maintain a period of livelihood while looking for the next job.

More than half of the respondents advocated short-term unemployment assistance

The survey results also show that 30.1% of the respondents believe that borrowing money to deal with unemployment or underemployment is not effective.

76% of respondents believe that the government should implement an unemployment insurance system; 54.8% said that short-term unemployment assistance should be established.

The Catholic Labour Affairs Commission pointed out that the Hong Kong government should formulate targeted unemployment support measures, provide unemployment financial assistance in the short-term, set up an unemployment insurance system in the long-term, and relax the working hours and asset limits of the working family allowance to allow more grassroots with financial difficulties. The family is supported.

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