"Relieving Local Credit Cooperatives' Overload"... Focus on Speeding Up COVID-19 Financial Support

Minister Park Young-sun of the Ministry of SMEs and Startups and Vice Chairman Son Byung-du of the Financial Services Commission are briefing on the status of bank consignment for COVID-19 guarantee operations and measures for prompt guarantee support in the lobby on the first floor of the Seoul Credit Guarantee Foundation in Mapo-gu, Seoul, on the 13th.

[Asia Economy Reporter Kim Hyo-jin] The focus of financial support for small business owners affected by the novel coronavirus infection (COVID-19) is shifting towards speed. This comes amid growing concerns about the effectiveness of policies, as it can take several months for support funds to be delivered.

According to financial authorities on the 15th, 70-90% of funding support applications due to COVID-19 damage are concentrated on guaranteed loans from regional credit guarantee foundations. Due to the surge in applications, the field reports that the guarantee review process and final loan execution take too long.

On the 13th, Park Young-sun, Minister of SMEs and Startups, visited the Seoul Credit Guarantee Foundation in Mapo-gu, Seoul, and announced a plan to "improve the system so that customers can directly visit policy fund-handling banks without going to regional credit guarantee foundations and execute guarantees and loans in one go."

The government has increased the number of regional credit guarantee foundations operating entrusted guarantees from 12 to 16 (adding Gwangju, Jeonbuk, Jeju, and Gyeonggi). The entrusted guarantee work, mainly handled by IBK Industrial Bank of Korea, will be expanded to Shinhan, KB Kookmin, Woori, Hana, and SC First Bank. Banks will assist with guaranteed loan applications, product guidance, document submission, and final agreements.

The financial authorities are promoting a plan to deploy retired personnel from policy financial institutions to support this effort. On the 13th, Eun Sung-soo, Chairman of the Financial Services Commission, said in a briefing on COVID-19 response, "We are trying to reduce the time required for fund execution to within three weeks," adding, "We are working to shorten what used to take two to three months to within three weeks."

Meanwhile, Woori Financial Group announced on the same day that starting from the 16th, it will dispatch about 150 Woori Bank employees to regional credit guarantee foundations nationwide, beginning with Daejeon and Jeonbuk, to support the issuance of guarantees for small business owners affected by COVID-19.

Eun Sung-soo, Chairman of the Financial Services Commission, is announcing the results of the temporary Financial Services Commission meeting related to COVID-19 response at the Government Seoul Office on the 13th.

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