Recently it has been reported that the minibus trade is facing operational difficulties and individual minibus operators have been subjected to early repayment of their loans by banks. The Chairman of the Hong Kong Taxi and Public Light Bus Association (HKTPA), Chow Kwok-keung, clarified in a radio program today (Feb. 22) that the banks had not taken the initiative to ask for early repayment of loans, but that some owners had their minibusses towed away without repaying them.
According to Chow, there were about 1,000 red minibusses in Hong Kong and about 100 minibusses had been towed in the past three years, most of which were red minibusses because the business of green minibusses was more stable.
Chow estimated that if the government did not introduce measures to help the trade, the number of towed minibusses would continue to increase.
The HKMA has recently mentioned that even with the recent drop in the industry's patronage and increased operating costs, banks will not ask their customers to make early repayments if they continue to do so.
In view of the uncertain business outlook, some operators intend to scale down or wind up their business. Notwithstanding the Pre-approved Principal Payment Holiday Scheme adopted by banks in offering interest but not principal repayment or partial repayment arrangements to eligible customers, a few operators chose not to continue to make any further repayment, and therefore the banks repossessed minibusses pledged as collateral according to the loan agreements to protect their own interests.
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