Ministry of SMEs and Startups, Supplementary Budget of 3.0667 Trillion Won... 1 Trillion Invested in Daegu and Gyeongbuk

[Asia Economy Reporter Kim Daeseop] The Ministry of SMEs and Startups announced on the 18th that during the National Assembly review process of the first supplementary budget bill for 2020, it secured 3.0667 trillion KRW, which is 1.3809 trillion KRW more than the government’s original proposal, giving momentum to support recovery efforts from the damage caused by the novel coronavirus infection (COVID-19).

During this National Assembly review process, an increase was reflected in support loans for small business owners by 800 billion KRW and regional credit guarantee fund guarantees by 44.8 billion KRW. A financial support budget of 2.6594 trillion KRW was allocated for emergency fund supply, guarantee support, and accounts receivable insurance.

Accordingly, the total scale of financial support provided to small business owners and SMEs increased to 8.52 trillion KRW, up approximately 3.07 trillion KRW from the original 5.45 trillion KRW. This includes 3.145 trillion KRW in loans, 5.175 trillion KRW in guarantees, and 200 billion KRW in accounts receivable insurance support.

Additionally, the supplementary budget includes 269 billion KRW allocated to small business growth support projects with 252.6 billion KRW and small business recovery support projects with 16.4 billion KRW for restoring damaged stores and stabilizing management. Through this, 198,000 COVID-19 affected stores nationwide will be supported. In particular, 177,000 affected stores in the special disaster areas of Daegu and Gyeongbuk (Daegu, Gyeongsan, Cheongdo, Bonghwa) will receive focused benefits.

Looking into the direct damage support details, through applications submitted to the respective local governments, 29,000 stores that had confirmed COVID-19 cases pass through them (26,000 in special disaster areas, 3,000 in other regions) can receive 3 million KRW per store for materials and restoration costs to normalize management. Additionally, 161,000 long-term closed stores (143,000 in special disaster areas, 18,000 in other regions) will receive 1 million KRW per store.

Stores that closed due to COVID-19 damage in the special disaster areas (8,200 stores) will receive 2 million KRW per store for demolition and restoration costs.

Furthermore, to reinforce economic vitality and stabilize livelihoods for small business owners and SMEs, a variety of economic vitality support budgets totaling 138.3 billion KRW were allocated, including online sales channel support, the Korea Together Sale, and traditional market revitalization budgets.

Examining the economic vitality support budget, support for small business owners’ online market entry was strengthened through online shopping mall entry support (10 billion KRW) and O2O platform support (1.5 billion KRW). To promote product consumption in traditional markets and shopping districts, 500 billion KRW worth of Onnuri gift certificates will be issued at a 10% discount (69 billion KRW), and joint marketing (21.2 billion KRW) was also reflected.

In the Daegu and Gyeongbuk regions, where COVID-19 damage is concentrated, special allocations were made to ensure priority support. In addition to 241.6 billion KRW for small business damaged store support in the special disaster areas of Daegu and Gyeongbuk, 19.8 billion KRW will be provided for commercialization and research and development (R&D) costs targeting regionally specialized companies. Approximately 700 billion KRW of the supplementary budget will also be invested in financial support.

Moreover, plans are underway to actively support livelihood stabilization and damage recovery in Daegu and Gyeongbuk by reducing guarantee fees for SMEs and small business owners in the special disaster areas and lowering loan interest rates for SMEs.

Park Young-sun, Minister of SMEs and Startups, stated, "With this supplementary budget, we plan to actively support small business owners and SMEs who are experiencing direct management damage and economic slowdown difficulties due to the spread of COVID-19 centered on Daegu and Gyeongbuk, helping them overcome management hardships and recover vitality."

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