Park Young-sun "Full Expansion of Regional Credit Guarantee Delegation"... Rapid Response to 'Small Business Loans'

On the 13th, Park Young-sun, Minister of SMEs and Startups, visited the Seoul Credit Guarantee Foundation located in Mapo-gu, Seoul, to inspect the current status of bank consignment for guarantee services aimed at overcoming the damage suffered by small business owners due to COVID-19 and to discuss measures for prompt guarantee support.

[Asia Economy Reporter Kim Daeseop] The Ministry of SMEs and Startups announced on the 13th that it will fully expand the outsourcing of application and reception tasks for regional credit guarantee foundations to private banks in order to provide rapid support for damages caused by the novel coronavirus infection (COVID-19).

On the same day, Minister Park Young-sun of the Ministry of SMEs and Startups visited the Seoul Credit Guarantee Foundation located in Mapo-gu, Seoul, and stated, "We plan to expand and reorganize the system so that customers can directly visit policy fund-handling banks without visiting regional credit guarantee foundations and execute guarantees and loans in an integrated manner."

The visit to the Seoul Credit Guarantee Foundation was arranged to check the financial support status for small business owners and to encourage employees who are working hard on-site to support small business owners.

Minister Park, along with Sohn Byung-doo, Vice Chairman of the Financial Services Commission, Kim Byung-geun, Chairman of the Korea Credit Guarantee Foundation Central Association, and Yoon Jong-won, President of IBK Industrial Bank of Korea, attended. They visited not only the Mapo branch of Seoul Credit Guarantee Foundation but also the Gongdeok branch of IBK.

In the case of Seoul Credit Guarantee Foundation, the entrusted guarantee target banks have currently been expanded to eight commercial banks to improve the convenience of guarantee applications and reception for small business owners. Proactive measures are being implemented to shorten the guarantee supply period by entrusting tasks such as guarantee consultation, document reception, and on-site inspection.

Minister Park said, "By greatly expanding the entrusted tasks of regional credit guarantee foundations, banks will perform tasks such as consultation and document reception, while regional credit guarantee foundations will focus on guarantee screening tasks to induce rapid guarantee supply," adding, "We are reorganizing the currently operated entrusted guarantees and promoting additional task outsourcing and expansion of participating banks in entrusted guarantees."

The operation of entrusted guarantees is expected to expand the regional foundations from the existing 12 to all 16 regional foundations. In addition, participating commercial and local banks will also be expanded. Various operational forms such as placing bank personnel within the foundations and establishing guarantee counters within banks will be implemented, but rapid guarantees will be promoted through the distribution of standardized work manuals.

Park Young-sun, Minister of SMEs and Startups (center), visited the Seoul Credit Guarantee Foundation located in Mapo-gu, Seoul on the 13th, and exchanged opinions with officials from the Financial Services Commission, the Korea Credit Guarantee Foundation Central Association, IBK Industrial Bank, and others on rapid guarantee support measures to overcome the damage suffered by small business owners due to COVID-19.

Minister Park said, "When the entrusted guarantee is implemented, the guarantee work, which currently takes 3 hours per case at existing regional credit guarantee foundations, is expected to be significantly reduced to 85 minutes."

The rapid screening and simplified screening of small-amount guarantees, which have already been introduced in six regional credit guarantee foundations, will also be expanded to all 16 regional credit guarantee foundations. For small-amount guarantees under 30 million KRW (66.5% of the total), only minimum requirements will be screened, and separate rapid screening teams for small-amount guarantees will be established for each of the 16 regional credit guarantee foundations. Most of the 1,671 personnel in the regional credit guarantee foundations are assigned to guarantee tasks, and 157 additional hires are underway.

Minister Park said, "The Central Association of Credit Guarantee Foundations plans to hire short-term personnel and dispatch them to regional credit guarantee foundations that need manpower." She added, "We will actively support the exemption from the application of the 52-hour workweek system for regional credit guarantee foundations in consultation with the Ministry of Employment and Labor."

In addition, to respond to the on-site funding demand of small business owners affected by COVID-19, the direct loan ratio of the Small Enterprise and Market Service will be expanded from the existing 25% to 30%. By expanding the direct loan ratio, which currently operates at 25% of the total funds for small business management stabilization funds, rapid fund execution will be promoted.

The Small Enterprise and Market Service can execute loans quickly through its own simplified screening method. While the proxy loan method takes about four weeks until loan execution, direct loans can be executed within four days, according to the Ministry of SMEs and Startups.

Minister Park emphasized, "I am sorry to the small business owners who are experiencing many difficulties due to COVID-19 and are waiting for policy funds," adding, "We will do our best to ensure that the necessary funds are supplied quickly to the affected small business owners."

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