Minister Park Young-sun: "Bottleneck in Small Business Funding Support to Be Resolved After Two Weeks" (Summary)

Park Young-sun and Kim Ki-moon Join Forces for Rapid SME Support
SME Council Meeting Held to Minimize COVID-19 Damage and Achieve Early Recovery

Park Young-sun, Minister of SMEs and Startups (second from left), and Kim Ki-moon, Chairman of the Korea Federation of SMEs (third from left), are attending the "COVID-19 SME Measures Meeting for Early Recovery of the People's Economy" held on the 16th at the Korea Federation of SMEs in Yeouido.

[Asia Economy Reporter Kim Cheol-hyun] Park Young-sun, Minister of the Ministry of SMEs and Startups (hereinafter referred to as the Ministry of SMEs), stated that the bottleneck caused by an overwhelming number of applications for policy funds for small business owners affected by the novel coronavirus infection (COVID-19) is causing delays in support, but "the backlog is expected to be resolved after half a month." The Ministry of SMEs also decided to implement a three-stage strategy to support small and medium-sized enterprises (SMEs) and small business owners struggling due to the spread of COVID-19: minimizing damage and resolving difficulties, supporting market diversification and sales increase, and supporting early normalization.

On the morning of the 16th, Minister Park and Kim Ki-moon, Chairman of the Korea Federation of SMEs, held a meeting at the Korea Federation of SMEs with about 20 people including cooperative association chairpersons and businesspeople to discuss minimizing damage and early overcoming of COVID-19. This meeting was organized to listen to voices from the field regarding the damage status of SMEs and small business owners caused by COVID-19 and to reflect the results in policies by identifying areas for improvement in the government’s measures prepared so far.

Minister Park said, "To expedite the processing of emergency management stabilization funds, we have agreed with the Financial Services Commission to start entrusted guarantee operations at commercial banks from this week." She explained, "Once entrusted guarantee operations begin, the number of cases processed per day will increase from the existing 2,500 to 7,000, but it will take some time to clear the backlog of 100,000 applications currently submitted."

The Ministry of SMEs has set up an emergency response team involving the Ministry and its affiliated organizations since the end of January to minimize damage to SMEs and small business owners caused by COVID-19. They have worked to identify and promptly resolve difficulties faced by SMEs not only domestically but also those operating in China. Minister Park also conducted a total of 18 sector-specific meetings and field visits to accurately assess the situation and listen to voices from the field. Based on this, a comprehensive livelihood economy countermeasure and an additional supplementary budget of 1.7 trillion won were prepared last month.

However, the SME sector unanimously stated that these support policies are not yet felt on the ground. Chairman Kim said, "Although the government is making all-out efforts such as establishing comprehensive support measures for COVID-19 and preparing supplementary budgets, the field has not yet felt government support." He added, "All efforts must be devoted to helping COVID-19-affected companies overcome the crisis, including preparing additional support measures for SMEs in Daegu and Gyeongbuk." He continued, "75% of SMEs in the Daegu and Gyeongbuk regions, especially 88% of retail and wholesale sectors, are reporting damage due to COVID-19," and said, "We plan to travel nationwide to investigate the damage status and report the field situation to the Ministry of SMEs."

On this day, the Korea Federation of SMEs explained the severe damage situation of SMEs and small business owners and appealed for the prompt preparation of related countermeasures. Specifically, they proposed nine difficulties including special measures for SMEs in Daegu and Gyeongbuk, shortening the time required for fund support and expanding employment retention subsidies to strengthen policy fund support for small business owners, expanding loan limits for affected companies including special guarantee support, and strengthening support for import-export SMEs.

SMEs and small business owners attending the meeting also voiced their difficulties caused by COVID-19 and requested expansion of fund support and improvement of support processes, strengthening support for import-export SMEs, and flexible application of public procurement systems. Hong Cheon-pyo, Chairman of the Seoul Western Supermarket Cooperative, lamented, "In these already difficult times, large companies are reducing the scale of credit purchases, making operations difficult, and some supermarkets are facing bankruptcy risks." Park Pyeong-jae, Chairman of the Surface Treatment Cooperative, said, "When I visited the field, many companies had closed, and many were worried about next month’s salaries and payment settlements." No Sang-chul, Chairman of the Korea Frame Industry Cooperative, requested, "Please support mediation costs for disputes such as contract cancellations and penalty demands caused by COVID-19." A representative of a mask export company requested to keep exports open enough to maintain trade relations with overseas buyers, and a businessperson also voiced difficulties in mask supply at industrial sites.

In response, Minister Park promised to expand financial support such as policy funds for SMEs and small business owners and improve systems such as establishing a rapid review team to enable quick support for applying companies. She also announced plans to engage in overseas marketing to discover alternative markets, hold the Korea Together Sale to promote domestic consumption, and support joint marketing for traditional markets. Minister Park emphasized, "Our country has overcome economic crises in the past with the connected strength of the people, SMEs, and small business owners," and added, "I believe the spirit of 'coexistence and mutual growth,' living together especially in difficult times, is the strongest power to overcome COVID-19."

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