6.4 Trillion Won Financial Support Provided Over Past 5 Weeks to Small Businesses Affected by COVID-19

[Asia Economy Reporter Kim Hyo-jin] A total of 6.4 trillion KRW in financial support has been provided over the past five weeks to small and medium-sized enterprises (SMEs) and small business owners who have suffered direct and indirect damage due to the spread of the novel coronavirus infection (COVID-19).

According to financial authorities on the 21st, from last month 7th, when the government announced its COVID-19 financial sector response measures, until the 13th of this month, a total of 81,000 cases and 6.4 trillion KRW in various financial supports have been carried out through policy financial institutions and banks.

The support includes maturity extensions (principal repayment deferrals) on existing loans and guarantees from policy financial institutions and banks, new fund supplies such as management stabilization funds, ultra-low interest loans, special guarantees, preferential interest rates and guarantee fees, deferred billing for card payments, and export-import financial support.

Small business owners accounted for 84% (68,000 cases) of the funding demand. Demand was high in domestic and service sectors such as restaurants (19,000 cases) and retail (14,000 cases).

Provided by the Financial Services Commission

The financial authorities plan to support small business owners with an additional supplementary budget of 12 trillion KRW. This includes 2.7 trillion KRW for management stabilization fund support, 5.8 trillion KRW for ultra-low interest loans around 1.5%, and 3.5 trillion KRW for bank interest subsidy loans.

Regarding the issue that the bottleneck in guarantee screening for low-interest policy fund loans, which have high demand, has not been completely resolved and it takes up to about two months to execute loans, the authorities are implementing a plan where banks handle customer-facing tasks such as product guidance and application reception, while regional credit guarantee foundations focus solely on screening tasks.

Accordingly, the financial authorities expect that the time required to execute loans will be reduced to about two weeks going forward.

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