Efforts to Minimize COVID-19 Impact... Additional Support for 'SMEs and Small Businesses' Following 'Aviation, Tourism, and Exports'

The arrival hall at Terminal 2 of Incheon International Airport was quiet on the 19th due to the impact of COVID-19. Photo by Moon Honam munonam@

[Asia Economy Reporter Joo Sang-don] Following the government's preparation of an additional supplementary budget worth 11.7 trillion won, support measures will be implemented for industries such as aviation, tourism, and exports, as well as for small and medium-sized enterprises (SMEs) and small business owners. These measures aim to minimize the damage caused by the novel coronavirus infection (COVID-19).

On the 19th, the government announced that it will operate a large-scale livelihood and financial stability program worth over 50 trillion won targeting SMEs, small business owners, and self-employed individuals in response to the COVID-19 crisis.

First, considering the funding needs of small business owners, a total of 12 trillion won in emergency management funds will be newly supplied, applying an ultra-low interest rate of around 1.5% to significantly reduce interest burdens. Additionally, special guarantees worth 5.5 trillion won will be supported for loans to SMEs and small business owners experiencing temporary difficulties, utilizing supplementary budget resources.

Furthermore, a total of 3 trillion won will be fully guaranteed to meet the urgent small-scale funding needs of micro small business owners who have suffered direct or indirect damage due to COVID-19.

Efforts will also be made to alleviate the financial burden on vulnerable groups. The current six-month or longer maturity extensions implemented by some banks and secondary financial institutions will be expanded to all financial sectors and policy-based low-income finance. The Credit Recovery Committee will add COVID-19 victims to its credit recovery support targets and implement preferential support for debt adjustment conditions such as principal repayment deferral and debt reduction.

Yesterday, the government also announced additional support measures for sectors including 'aviation, transportation, tourism, exports, and shipping.' The scope of unused transport rights and slot recovery deferrals due to overseas entry restrictions and flight suspensions will be expanded to cover all routes. Landing fee reductions will be implemented immediately, with the discount rate increased up to 20%. The reduction amount is estimated at 11.4 billion won for the two months of March and April. Aircraft parking fees at nationwide airports will be fully waived for three months (approximately 7.9 billion won). Fees for the use of air navigation safety facilities (totaling 12 billion won) will also be deferred for three months. Highway tolls for buses will be waived until the crisis alert level is downgraded to 'caution.'

To enable SMEs and mid-sized companies to immediately convert export receivables into cash, an additional 500 billion won will be provided for early cash conversion guarantees of export bonds, and urgent overseas marketing through online consultations, exhibitions, and trade offices will be promptly promoted. For the tourism industry lacking collateral capacity, the scale of unsecured credit guarantee special loans will be increased to 100 billion won, and the targets for tourism fund loan repayment deferrals and maturity extensions (up to one year) will be expanded to 200 billion won. For 200 small theaters, up to 60 million won per venue will be provided for planning and production support. To help recover demand for performances, discount coupons worth 8,000 won per spectator will also be offered.

The shipping sector, which is struggling due to passenger transport suspensions, will also receive additional support. Korean-Japanese ferry companies will be added to the targets for port facility usage fee and rental fee reductions, with the discount rate increased to 10%. Rent for terminal tenants such as duty-free shops and convenience stores will be waived up to the full amount.

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