From *January to September 2006, the total winding-up petitions decreased from 777 to 540 and winding-up orders decreased from 640 to 379 respectively, which indicate a significant drop of 30.5% and 40.78% as compared to the same period in 2005*.

Economists, generally forecasted a full year real GDP growth of 5-6% in 2006, are expecting a slow economic growth over the outlook period for 2007 and 2008 in view of certain risk factors from the external front including gradual building up of global inflationary pressures, high oil prices, weaker growth in US economy and global trade imbalances. Despite these forecasts, the Hong Kong economy has apparently been rebounding since 2004, to a certain extent at least.

While feeling excited in seeing the newly elected and coming-on-board 2006-2007 Executive Councilors and Executive Committee Members from diverse industries, I take this opportunity to thank each of our members, executive councilors, executive committee members, various committee chairs and members for their unreserved supports and contributions; and especially to my family, friends and associates, who have been so listening and supportive, in backing me up in my past year of service in the HKCCMA.

As said in many of my past chairman statements, it has always been my honor to have served HKCCMA as Chairman, I am confident that the Association will continue its steady growth with new members and volunteers, contributing their time and talent. We should all be proud to see HKCCMA, the only credit and collection industry association in Hong Kong and China , being recognized as a leading association internationally, is heading to its six-year anniversary. The Association will continue leading the industry and the practitioners, which are undoubtedly benefiting the members, the general public, and the economy at large.

Once again, it is my honor to represent the Executive Council and Executive Committee to deliver this statement and report to members on the Association's achievements and future outlook.

Review and Achievements

Executive Council and Executive Committee

Since July 2005, the Executive Committee has been leading the Association and running the overall business and management. The Association's Tie and Scarf, Mix at Six, Survey, Certification Program, Strategic Planning, Financial and Accounting Management, Who's Who, AGM and many other issues and decisions were the results of their monthly focused meetings. While there are differences in perspective and opinion, which exist in any organizations and businesses, these are invaluable synergy to the growth of the Association.

Members and Recruitment

The Association currently has around 100 members comprising various commercial and business sectors including banking and finance, electronics, telecommunication, law practice, accounting and auditing, shipping and transportation, manufacturing, trading, debt collection agencies, credit reporting agencies and the major credit insurance companies. This diverse membership base, reflecting the diversity of Association, enables us to have more balanced views and ideas on different issues and plans ahead. The Membership Committee has been working diligently in the planning, marketing and promotion of the recruitment, and resulted a satisfactory membership base. We have also seen a substantial increase of overseas members, which reflects the Association's international exposure.

Website and Surveys

The Association website's hit rate continues to grow with over 5,000 times a month from the members, general public and overseas. HKCCMA conducted a survey of on “Credit Portfolio Management, Risk Perception, Terms of Payment and Credit Management”, to better understand of how companies perceive changes in these areas in related to business opportunities. Jeremy Hampshire, our Survey Committee Chairman, will announce the survey result in the upcoming AGM.

Since our inception in December 1999, the Association has carried out 14 surveys. Along with the “Job Classified”, “Discussion Group” and “Credit Quiz” on our website, HKCCMA has been serving as the major news provider, and providing education channels for the industry.

Certification Program

The Credit & Collection Professional (“CCP”) certification program was officially launched in September 2005 with the first on-line examination took place on 25 March 2006 at the Hong Kong Examinations and Assessment Authority. The Association subsequently held the second examination on 30 September 2006 at the same location. Passed candidates include Christopher SIU Chun Ho, Stephen LO Sai Kit and Franky KWOK Siu Fai. On behalf of HKCCMA and the Certification Committee, I congratulate all the certified CCPs. An official certificate presentation ceremony will be held in the upcoming AGM to recognize their achievements, and to highlight the inauguration of this program and first examinations.

The CCP program ad designation, after five years of discussions, studies and preparations between ACA International's Campus ACA and the HKCCMA Certification Committee, was developed to recognize professionals who have extensive knowledge of the laws and practices in Hong Kong and mainland China . The designation, designed for mid-to-senior-level executives in credit or collection industry, is to recognize individuals who are certified by passing in the exam ination developed by regional industry experts.

I would once again take this opportunity to urge all members and non-members, who have been in the credit and collection industry, to obtain more details of the program, application requirements and fees which are available on the Association's website www.hkccma.com or simply email your enquiry to ccp@hkccma.com . It is the only program that you, as professional credit and collection practitioners, in Hong Kong and mainland China , can certify yourselves in your profession and be recognized .

For those who were not aware, the CCP is a tailor-made certification program developed by HKCCMA and ACA International, USA (the world's largest credit and collection industry association and has established for over 60 years) in 2001 for Hong Kong and China . HKCCMA is the exclusive certification body of the CCP program for Hong Kong and China .

Mix At Six

The Association held two the widely known and welcomed “Mix-At-Six” functions in 2005-2006, which provided an after-office mix and mingle function for members and non-members. Mix-At-Six has been a relaxing business and intelligence exchange, and friendship build-up function since its commencement many years back. The Association will continue organizing this traditional event and look forward to seeing more members, non-members and guests to participate in the future.

China Development & Outlook

I believe we are all witnessing a transformation in our industry. One of the realities we are facing with is the increasing economic integration between the Mainland China and Hong Kong . We saw regional credit and collection headquarters increasingly moving to Mainland China , to major cities like Shanghai , Guangzhou and Beijing . Not only are more Hong Kong companies doing business on the Mainland, but also more Mainland companies are tapping funds from Hong Kong and international investors. *Mainland enterprises account for about two-fifths of the Hong Kong Stock Exchange's total market cap and over half of total equity turnover, and these figures are expected to continue to rise.

Since early 2003, the Association has been actively participating in the development with the industry clubs and operators in Mainland China by delivering our mission and exchanging ideas and views of the industry development in and between Hong Kong and Mainland China . One of the Association's major goals is to introduce the CCP program to Mainland China , through the co-operation of an appropriate entity there, to help experienced and qualified practitioners certifying themselves. I am pleased to report that the development process is reaching to its final stage, where further announcement will be seen at HKCCMA's website in the near future.

Regulations of Debt Collection Practices

“ Debt Collection Regulations rejected by the Administration, HKCCMA's voice, views and comments are heard and accepted !”

On 9 September 2005, The Security Bureau of Hong Kong SAR Government (“the Administration”) announced that Laws on regulating debt collection practices are redundant and rejected the recommendations from Law Reform Commission to create specific laws on regulating debt collection practices.  The Administration has taken the view that *“ the existing criminal offenses and Ordinances are sufficient to combat most of the undesirable debt collection activities in general. Therefore, the necessity of creating standalone laws and ordinance are not required”* .

In addition, the Administration also reached a conclusion that * “a statutory licensing regime is not an effective mean to regulate the conduct of the debt collection industry. It is the view of the Administration that a licensing regime would likely only cover prudent and ethical market operators, who would not engage in abusive activities even in the absence of a licensing regime”* . In addition, the Administration *“ is not convinced that the introduction of a licensing system would significantly raise the level of professional standards in the debt collection industry since unscrupulous debt collectors would unlikely seek to be licensed. The responsibility of regulating agencies and setting up conduct code should be placed on industry associations to ensure debt collection agencies that are employed by their members are not engaging in improper collection activities”*.  

In conclusion, the Administration commented that * “the introduction of any industry-specific regulation will inevitably have repercussions on the trade and should only be done though a multi-disciplinary approach to addressing the issues such as creating a more efficient and accessible judicial channel for creditors, enhancing the sharing of positive consumer credit data amongst financial institutions and providing welfare needs and education to those with debt problems”*.

HKCCMA, as the only credit and collection industry association in Hong Kong and China, supports the Administration's decision, especially admitted that * “ The responsibility of regulating agencies and setting up conduct code should be placed on industry associations to ensure debt collection agencies that are employed by their members are not engaging in improper collection activities”* . This was exactly the Association's view in our proposal submitted to the Law Reform Committee (LRC) back to September 2000, prior to LRC submitting the report and recommendations (* suggested establishing a licensing regime and criminalizing abusive tactics in debt collection* ) to the Government in 2002.

Accomplishing this major victory to our industry was through the diligent efforts of many meetings of the committee and staffs, and the survey conducted among 15 agencies and 50 industry practitioners and organizations in August 2000, which resulted the Association's view *“ supporting the establishment of a licensing regime but found the criminal offence of harassment to be unfair to credit providers and debt collectors ”.

I would like to take this opportunity to specially thank Bobby Rozario, the Association's Vice-Chairman, who had been contributing his unreserved effort in various meetings and surveys, as well as furnishing the professional report and proposal to LRC. Without his leadership and expertise, this important win was impossible. Congratulations to Bobby, the Association, and each of the members and industry practitioners for a hard fought and well-deserved victory!

Media and Press

HKCCMA was interviewed by the press and responded the following comments on the issues, which included:

The Sun Daily – “ Recommend the government departments to consider outsourcing the dunning works for unpaid court fines to debt collection agencies as the number of these types of unsettled accounts is getting bigger and bigger” .

Apple Daily – “ Seeing more University students having indebted problems with financial institutions due to unwise investments made in the local stock markets. Credit providers should take up social responsibility and be prudent when granting credit to university students”.

Positive Credit Data and Updates

Consumers in Hong Kong are benefiting from the positive credit data sharing, according to a Feb 2006 released statistics (“the Statistics”) from the service provider and numerous financial institutions in the market. The statistics released to the chairman of the Hong Kong Monetary Authority (HKMA) are part of the first assessment of an ongoing program that began three years ago (in 2003), allowing consumers' positive credit data to be shared by credit providers.

*Since the beginning of positive data sharing in August 2003 and until September 2005, the Statistics reveals:

Credit card receivables increased by nearly 10 percent from $54 billion to $59 billion Rollover amounts (borrowing of which cardholders have not fully repaid) fell by 17 percent from $29 billion to $24 billion. The rollover ratio (the percentage of rollover amounts to the total amount of card receivables) declined 13 percent from 54 percent to 41 percent.

Individual unsecured credit (non credit cards) loans increased by 38 percent from $29 billion to $40 billion from December 2003 to December 2005.

In addition, the market share of non-bank financial institutions that offer loans to consumers increased 5 percent from 25 percent to 30 percent. With the complete picture of both positive and negative information, these institutions were able to better manage, price and aggressively market their loans to consumers at much lower interest rates*.

HKCCMA supports the sharing of positive credit data, which will build up a more healthy credit environment. This is also in line with the survey result conducted in early 2003 (showing a majority support of the sharing of positive credit data among banks) and the Association's mission “ To strive for the preservation of a healthy credit environment in our society ”.

Who's Who, Credit & Collection Practitioners in Hong Kong and Guangdong 2005-2006 (“Who's Who”)

Recognition

Premier Global - HKCCMA Credit Practitioner of the Year 2005-2006

This yearly award is to recognize the winner's achievements in the credit and collection arena in the aspects of industry contribution; education; training; management; operation and customer service in the year 2005 to 2006. The Award Presentation Ceremony will be held in the upcoming Annual General Meeting on 26 th October 2006.

This year's Judge Panel is composed of:

• Mr. Frank Lukas, Senior Vice President, Regional Service Centre APAC - Bayer MaterialScience Limited;
• Mr. Ralph Lai, Deputy Regional Managing Director - Coface Hong Kong Branch;
• Mr. William Lee, Professor of the Department Accountancy of The Hong Kong Polytechnic University ;
• Mr. Henning Siess, Chief Executive Officer of Euler Hermes Credit Underwriters Hong Kong Limited; and
• Mr. Benedict Wong , the Association's Chairman.

Thanks to the Annual Award Committee, and especially the Judge Panel as they performed a very difficult task in selecting the best from the best.

On behalf of the Association, I congratulate the Award Winner. I would also like to specially thank Premiere Global Services and express our gratitude to their generosity in sponsoring this year's award, which is the backbone of the Annual Award program.

Acknowledgement

Upon the completion of the AGM on 26 th October 2006, the Association will step into the seventh year from its establishment. I do not lay claim to any victory or achievement – that claim belongs to my fellow members on the Executive Council, Executive Committee; our staffs, and our various committee chairs and committee members. Enthusiastically, I look forward to seeing the prosperous future of HKCCMA, and when thinking of it I must once again thank each of them for their volunteered effort and untold hours, and days of input and intelligence, which has been a guiding candle to the Association growth. Without their hours and days of dedication, HKCCMA would not be the organization it is today.

I would like to specially thank our staffs Betty Huen, Andrew Kwok and Eddie Chan, as well as the Executive Councilors and Executive Committee Members Andrew Mak, Bobby Rozario, Christopher Siu , Franky Kwok, Jeremy Hampshire, Patrick Cheung, Stephen Lo and Xavier Farcot. Thanks once again go to Andrew Mak, Christopher Siu, Franky Kwok and Patrick Cheung who will be retiring from the Executive Council and Executive Committee after the coming AGM, especially to Patrick Cheung who has consecutively served the Association as Executive Councilor and Executive Committee in the past two years. As members of the credit and collection industry, we are blessed to have an association torch that burns so brightly and even more fortunate to have a solid line of leadership coming on board to carry it on.

On behalf of the Association, I thank our Honorary Patrons ACA International; Mr. Gary Rippentrop (Chief Executive Officer of ACA International) and Mr. Neil Wood (Past Chairman of the International Unit of ACA International and Chairman of GCS Group), and our Honorary Legal Advisor Mr. Victor Chan (Partner of Tang, Wong, Cheung & Co) and Honorary Auditor Mr. Sam Lau (Partner of S. L. Lee & Lau, Certified Public Accountant).

Way Forward

The Executive Council

The Association is walking towards its seventh year of establishment. The election result of the 2006-2007 Executive Council has been announced earlier to all members. The new Executive Councilors will officially assume duty after the Annual General Meeting to be held on the 26 th October 2006 at the Park Lane Hotel . The present Executive Councilors will retire along with the close of the AGM and the new elected Executive Councilors for the 2006-2007 are:

•  Ricky Chan Cheong Yip

•  Xavier Farcot

•  Jeremy Hampshire

•  Stephen Lo Sai Kit

•  Bobby R. Rozario

•  Benedict Wong Chi Kwong

I would like to welcome our new Executive Councillor Ricky Chan, who has extensive experience in association business. His joining will further strengthen the Association in the year ahead. I look forward to working with all the 2006-2007 Executive Councillors for the growth of the already well-established Association.

The Executive Committee

To further strength the operation and management of the Association, and in line with the Articles of Association of HKCCMA and for the purpose of transacting the day-to-day business of the Association, the Executive Committee (consisting of the Chairman, the Vice Chairman and other Executive Councilors), appointed by the Council, was born in July 2005 right after the 2005 AGM. The 2005-2006 Executive Committee is composed of all of the nine executive councilors from the Executive Council.

The 2006-2007 Executive Committee will be appointed concurrently with the first 2006-2007 Executive Council meeting to be held on the 26 th October 2006, after the upcoming AGM. Result of the 2006-2007 Executive Committee appointment will be announced to all members accordingly. The 2006-2007 Executive Committee, to run and manage the day-to-day business of the Association, will be reporting to the Executive Council, and ultimately to the members.

Outlook and Plans

The Association's 2006-2007 outlook plans, as discussed and approved by our 2005-2006 Executive Committee, are: 

•  Continue marketing the Credit and Collection Professional (“CCP”) certification program in Hong Kong; and to launch the program in mainland China by sponsoring through a well-established and experienced entity in the credit and collection industry in mainland China

•  Continue producing surveys on credit and collection related topics published under the name of the HKCCMA

•  Continue establishing domestic and global recognition and affiliation with industry associations and professional bodies

•  Feasibility study on developing more industry publications and/or expanding the coverage of "Who's Who, Credit & Collection Practitioners in Hong Kong and Guangdong ”

•  Exchange seminars and training programs with industry associations in mainland China to develop the professionalism in the credit and collection industry

•  Review the criteria and prepare open nomination for the Annual Award program “Credit Practitioner of the Year”. The new award nomination procedures and criteria will be available at the Association's website at a later stage.

•  Organize functions and events for members and non-members, hopefully through sponsorship, to exchange, mix and mingle through casual evening events such as “Mix-At-Six”

•  Provide free educational courses, seminars and workshops for members, with focus on the CCP certification program, to assist members and non-members to get educated, certified and recognized

HKCCMA is not a very long history but seven-year-old association, and I am always mindful of the realities of the membership base we represent. This is an association of hardworking, largely credit and collection executives, practitioners and business owners from small to mid-sized companies who spend more than 40 hours in their offices each week to realize their career and entrepreneurial dreams. As I have stated many times over in the past year, it is a wonderful time to be chairman of HKCCMA.

Before closing this statement, I deeply thank again all our members for their supports and participations. On behalf of the Association, I wish all the happiness, good health, and with successful careers and businesses to you all.

See you in the upcoming Annual General Meeting!

Benedict C. K. WONG , FCCMA, MCE
Chairman
Hong Kong , October 2006

*Figures, statistics and data in this statement are extracted from related government departments, Hong Kong SAR.