Yellow Umbrella Mutual Aid Loan Expanded to 2 Trillion Won... Expected to Help Respond to 'COVID-19'
Providing Loans to 200,000 Noryan Usan Gongje Subscribers to Meet On-Site Funding Needs of Small Business Owners
[Asia Economy Reporter Kim Cheolhyun] The Ministry of SMEs and Startups (Minister Park Young-sun) and the Korea Federation of SMEs (Chairman Kim Ki-moon) announced on the 10th that they will expand the Yellow Umbrella Mutual Aid (Small Business Mutual Aid) loans to a scale of 2 trillion won to meet the funding demand of small businesses and small merchants struggling due to consumption stagnation and sharp sales decline caused by the spread of the novel coronavirus infection (COVID-19).
To respond to COVID-19, the interest rate on Yellow Umbrella Mutual Aid loans has been temporarily reduced by 0.5 percentage points since February 13, resulting in an average daily loan amount of 9.9 billion won. As of the 6th, a total of 16,135 cases and 168.3 billion won in loans have been executed. To meet the loan demand of Yellow Umbrella Mutual Aid subscribers, the mutual aid loan fund will be expanded to 2 trillion won, which is expected to ease the financial operations of about 200,000 mutual aid subscribing small merchants. In addition, small merchants who have difficulty paying mutual aid contributions due to business deterioration can defer payment of contributions for six months.
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Subscribers of the Yellow Umbrella Mutual Aid can borrow loans for one year within 90% of the mutual aid cancellation refund amount, and loans can be immediately processed on the day of application by visiting the regional headquarters or centers of the Korea Federation of SMEs, or applying via the internet, smartphone, or phone. Gwon Dae-su, Small Business Policy Officer of the Ministry of SMEs and Startups COVID-19 Response Team, stated, "We hope that the expansion of Yellow Umbrella Mutual Aid loans and the interest rate reduction will be a great help to small merchants going through difficult times due to the spread of COVID-19. We will also strive to alleviate the difficulties faced by small merchants in their livelihoods through the prompt execution of the COVID-19 supplementary budget."
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