4 Ministries under the Ministry of SMEs and Startups Execute 466.7 Billion KRW in COVID-19 Policy Funds

Sanha Jungjingong, Sojingong, Jiyukshinbo, Gibo
Applications Received and Counted from Last Month 13 to March 10
Policy Fund Execution Rate Compared to Applications 8.9%
Number of Applications 110,988, Amounting to 5.2392 Trillion Won

Park Young-sun, Minister of SMEs and Startups

[Asia Economy Reporter Kim Daeseop] The Ministry of SMEs and Startups announced on the 11th that the total number of policy fund applications received by its four affiliated institutions related to the damage caused by the novel coronavirus infection (COVID-19) reached 110,988 cases, amounting to 5.2392 trillion KRW.

This is based on cumulative figures from February 13 to March 10 from the Small and Medium Business Corporation, the Small Enterprise and Market Service, the Korea Credit Guarantee Fund Central Association, and the Korea Technology Finance Corporation.

By institution, the numbers were ▲ Small Enterprise and Market Service (SEMAS) with 68,833 cases and 3.5977 trillion KRW ▲ Regional Credit Guarantee Foundation with 41,143 cases and 1.3589 trillion KRW ▲ Small and Medium Business Corporation (SBC) with 773 cases and 241.1 billion KRW ▲ Korea Technology Finance Corporation (Kibo) with 240 cases and 41.6 billion KRW. The majority of demand came from small business owners.

By region, the figures were ▲ Gyeonggi 15,889 cases (14.3% of total) ▲ Daegu 10,580 cases (9.5%) ▲ Seoul 10,270 cases (9.3%) ▲ Gyeongbuk 10,131 cases (9.1%) ▲ Chungnam 7,734 cases (7.0%), among others.

By day, after applications began on February 13, there were 4,896 cases as of the 25th, but the number of applicants surged significantly in March. The daily figures were ▲ March 2: 8,035 ▲ March 3: 7,702 ▲ March 4: 8,535 ▲ March 5: 8,942 ▲ March 6: 10,540 ▲ March 9: 14,048 ▲ March 10: 9,512 cases.

From the first application on February 13 to March 10, the actual support provided amounted to 10,217 cases (9.2% of applications) and 466.7 billion KRW (8.9% of applications).

By institution, the supported cases were ▲ SEMAS with 3,726 cases and 164.8 billion KRW ▲ Regional Credit Guarantee Foundation with 5,980 cases and 187.4 billion KRW ▲ SBC with 331 cases and 82.9 billion KRW ▲ Kibo with 180 cases and 31.6 billion KRW.

By region, supported cases were ▲ Gyeonggi 983 cases (6.2% of applications) ▲ Daegu 589 cases (5.6%) ▲ Seoul 886 cases (8.6%) ▲ Gyeongbuk 334 cases (3.3%) ▲ Chungnam 106 cases (1.4%).

Looking at daily support cases, in February they were ▲ 13th: 0 cases ▲ 25th: 343 cases, and in March ▲ 2nd: 576 ▲ 3rd: 834 ▲ 4th: 955 ▲ 5th: 1,000 ▲ 6th: 1,089 ▲ 9th: 2,022 ▲ 10th: 1,022 cases. The scale of disbursement is also showing an increasing trend.

The Ministry of SMEs and Startups has been actively supporting small and medium enterprises and small business owners to overcome COVID-19 damage through its affiliated institutions. In the small business sector, SEMAS expanded the policy fund scale from 20 billion KRW to 500 billion KRW. Since March 2, the loan interest rate has also been lowered by 0.25 percentage points from 1.75% to 1.5%.

From March 6, online issuance of policy fund support confirmation certificates has been implemented. Applicants can apply online without visiting the Small Business Center, print the certificate themselves, and then visit the Regional Credit Guarantee Foundation. Due to the surge in fund applications, as of March 9, 41 out of 237 SEMAS headquarters staff and 102 temporary staff were concentrated at the centers.

The Regional Credit Guarantee Foundation also reduced the guarantee rate by 20% starting February 13. To ease the burden on the foundation, the central government's re-guarantee ratio was increased from 50% to 60%. Simplification of on-site inspections for rapid guarantees is also underway.

Especially in the severely affected Daegu and Gyeongbuk regions, the guarantee limit per company (2 billion KRW) was abolished from February 28, allowing support regardless of existing guarantees. A total of 67 available personnel from the Ministry and others were dispatched to the Regional Credit Guarantee Foundation, and a collaborative system between ministries and local governments was established for rapid staffing.

In the SME sector, SBC expanded the eligible industries for support. The list was significantly increased to include small hospitals and clinics, educational services (excluding entrance exam academies), franchises, small movie theaters, and wedding businesses affected by COVID-19. The loan interest rate was also lowered by 0.5 percentage points from 2.65% to 2.15%. The support limit per company was increased from 1 billion KRW to 1.5 billion KRW.

Active extensions of loan maturity and repayment deferrals are also being implemented for borrowing companies. Maturity extensions are granted without applying the minimum repayment requirement (25%), without charging additional interest (0.5%), and with rapid processing without requiring sales-related documentation. Repayment deferrals have been expanded to all companies holding existing loans that are experiencing short-term cash flow difficulties.

Kibo added industries related to performance venues, exhibition industries, and event agencies to the support target sectors. Since March 9, procedures have been simplified by reducing paperwork, enabling non-visit applications and agreements, and operating so that on-site investigations and guarantee support are completed within three days.

Byun Taeseop, head of the Ministry of SMEs and Startups COVID-19 Response Team (Director of SME Policy Office), said, "We are making our best efforts to minimize the damage to small and medium enterprises, venture companies, small business owners, and self-employed people due to the spread of COVID-19."

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