The Hong Kong government has approved a $6.4m (HK$50m) Film Guarantee Fund which is designed to help local companies obtain bank loans for film production.
Only two changes have been made to initial proposals for the fund. The government issued a consultation paper in October recommending that the fund only underwrite loans to productions that cost no more than $960,000 (HK$7.5m). The paper also proposed that, in order to qualify for the scheme, applicants should have produced at least three theatrical films in the past five years.
Following a month-long consultation period, the scheme has been slightly amended. There is now no ceiling for film budgets and applicants need to have produced only three films in the past 10 years. All other criteria remain the same.
The scheme will initially run for two years on a revolving basis with loan guarantees discharged by the banks being ploughed back into the fund for future applications.
Production companies have to provide 30% of the total budget of each qualifying project and have a completion bond - or similar arrangement - in place. At least half the cast and crew should be Hong Kong residents.
The fund - which will be derived from the existing $12.8m (HK$100m) Film Development Fund - will then guarantee 50% of the loan provided by the bank, to a maximum of HK$2.6m. The government estimates that the scheme will attract production investments of about $18m (HK$140m).
The fund was initially discussed at a one-day film industry forum - organised by the Federation of Hong Kong Film Workers - which was called in response to a sharp downturn in both production levels and box office for domestic films.
However it has attracted criticism from some quarters for being too meagre to help boost production. Skeptics have also questioned whether it will really encourage banks to lend money to an industry that they know little about.