Extension of Loan Maturities for SMEs and Small Business Owners Affected by COVID-19 to All Financial Sectors

Hong Nam-ki, Deputy Prime Minister and Minister of Economy and Finance (center), Eun Sung-soo, Chairman of the Financial Services Commission (right), and Park Young-sun, Minister of SMEs and Startups, are briefing on the results of the emergency economic meeting at the Government Seoul Office in Jongno-gu, Seoul on the 19th. Photo by Kim Hyun-min kimhyun81@

[Asia Economy Reporter Kim Hyo-jin] Loan maturities will be extended for at least six months across the entire financial sector for small and medium-sized enterprises (SMEs) and small business owners who have suffered direct or indirect damage due to the spread of the novel coronavirus infection (COVID-19).

On the 19th, the government announced additional support and supplementary measures related to COVID-19 damage, including this extension.

Accordingly, the current maturity extensions implemented by policy financial institutions and commercial banks will be expanded to the secondary financial sector such as savings banks, insurance companies, and card companies, as well as policy-based low-income financial sectors.

For bonds maturing by September 30, maturities will be extended by more than six months from the application date. The target beneficiaries are SMEs and small business owners without delinquency on principal and interest payments or capital erosion.

The six-month interest payment deferral (including principal and interest installment deferral) for SMEs affected by COVID-19, which was previously implemented only upon application at some banks, will be expanded to the entire financial sector and policy-based low-income financial sectors.

The government will support rapid and full guarantees totaling 3 trillion won to help micro small business owners who have difficulty accessing finance to obtain loans more easily. It is estimated that more than 60,000 businesses can be supported with a limit of 50 million won per company.

The Credit Guarantee Fund will provide 600 billion won, the Korea Technology Finance Corporation will provide 300 billion won, and regional credit guarantee foundations will provide 2.1 trillion won.

The plan is to conduct screening with only a minimal checklist such as tax delinquency or delinquency history. The guarantee fee rate will be preferentially reduced by 0.5 percentage points compared to the existing guarantee fee rate.

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