5,000 Daily Loan Inquiries from Small Business Owners Due to COVID-19

Due to the impact of the novel coronavirus disease (COVID-19), a temporary closure notice is posted at a restaurant in Jongno-gu, Seoul on the 4th. Photo by Kim Hyun-min kimhyun81@

[Asia Economy Reporter Moon Hyewon] "Our sales are currently less than half of usual, so we have no choice but to take out loans to cover urgent expenses. I wonder if the bank will lend us more. Now, I don't even know where to ask."

As the spread of the novel coronavirus infection (COVID-19) freezes the bottom economy, loan consultations from small business owners facing threats to their livelihoods are rapidly increasing. They are knocking on the doors of support organizations to overcome the crisis because it is difficult to survive day by day.

According to the Small Enterprise and Market Service (SEMAS) on the 5th, as the COVID-19 situation spreads, inquiries related to loans among consultation cases received through SEMAS and the Korea Federation of Micro Enterprise (hereafter KOFME) have reached 4,929 as of the 3rd of this month. Compared to 1,820 cases on the 13th of last month when consultations began, the number of consultations has surged nearly 2.5 times. The total loan request amount received at centers nationwide as of this day is 1.93 trillion won.

SEMAS is currently receiving damage reports, consultations, and applications from small business owners at 62 regional centers nationwide. Normally, about 400 employees work at these centers, but since the COVID-19 outbreak, consultations from small business owners have increased exponentially, and recently, 124 additional personnel have been supported by the government. In addition, senior staff from SEMAS Seoul headquarters are currently dispatched to various regional centers. According to SEMAS, many inquiries come to the Jung-gu center in Seoul, where many self-employed people are concentrated, the Daegu Southern center, which has been heavily affected by many COVID-19 confirmed cases, and the Pohang center in North Gyeongsang Province.

Private organization KOFME is also receiving a flood of damage consultation inquiries from small business owners. A KOFME official said, "As the organization where small business owners nationwide can first request help, loan consultations are continuously coming through the association branches, chapters, and call centers to which they belong," but added, "Since we are a private organization, we cannot accept or process loan applications, so we provide the contact numbers of SEMAS centers responsible for this."

Meanwhile, the Ministry of SMEs and Startups has decided to invest 1.6858 trillion won in a supplementary budget to establish a foundation for recovery from COVID-19 business damage for small and medium enterprises and small business owners. This amount corresponds to 35.9% of the Ministry's budget of 4.6898 trillion won.

This content was produced with the assistance of AI translation services.