The Methods of Collecting Funds Among the First-Generation Plastic Factory Owners (II)

Apart from bank loan, plastic industrialists also borrowed from loan sharks. Interest rate was rather harsh. At that time the government did not impose control on private loan. Those who reported to the government would lose their borrowing privileges. It was a common practice that creditors could not resort to legal means and intimidation to debtors who failed to repay. Lending was a lucrative business at that time. Borrowers could not get a full sum of loan. For example, a borrower only obtained $6,000 from a $10,000 -loan. Small Chinese-capital banks such as Canton Trust and Commercial Bank was used to extend credit to Chinese industrialists.
Lam had lent to numerous small industrialists. He once over-drafted two-month pay, i.e. $500, to help a customer of Yuen Hing Hong Co. Ltd. He also lent $5000 to an industrialist who was going to found his business. Lam reiterated that at that time industrialist were suffered from fund shortage when they started up their business. They only borrowed for their enterprise. Hong Kong’s toy industry thrived in the 1970s. Industrialists strengthened their financial status so they no longer relied on loan sharks. Lam only got collateral loans from bank. In most cases he picked HSBC as both parties had built up a long-term partnership. Usually he was able to secure a 30% loan while 50% was his maximum. Industrialists often obtained loan from small banks without putting down any collateral. Bank staffs tended to extract commissions from borrowers. This practice was especially popular in Taiwan.

Company Forward Winsome Industries Limited
Subject Industry
Duration 24m23s
Language Cantonese
Material Type
Source Hong Kong Memory Project Oral History Interview
Repository Hong Kong Memory Project
Note to Copyright Copyright owned by Hong Kong Memory Project
Accession No. LKF-LT-SEG-034
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