HONG Kong's government said yesterday that a special loan guarantee scheme for small- and medium-sized firms would be increased from a maximum of HK$1million (S$212,000) to a maximum of HK$6million to combat the global economic crisis.

It added that it does not expect Hong Kong's economy to fully recover from the crisis until 2010.

The extended scheme, which should be effective before Christmas, will increase the government's commitment to HK$100billion, Chief Executive Donald Tsang told reporters.

SMEs provide about 50per cent of private-sector jobs in Hong Kong, but many are struggling amid the economic downturn.