Seoul Mayor Park Won-soon: "Expand Small Business Financing to 5 Trillion Won"

Processing from Consultation to Loan within 10 Days

[Image source=Yonhap News]

[Asia Economy Reporter Jo In-kyung] The Seoul Metropolitan Government is significantly expanding the credit supply scale to 5.09 trillion won for small and medium travel agencies, small academies, neighborhood restaurants, and other small business owners and self-employed individuals in Seoul who have suffered direct and indirect damage due to the spread of the novel coronavirus infection (COVID-19).

On the morning of the 25th, Mayor Park Won-soon held a regular COVID-19 briefing and stated, "We will expand the financial lifeline for 660,000 small business owners and self-employed individuals, who form the backbone of Seoul's economy, and operate multifaceted livelihood finance innovation measures to enable more convenient and prompt support on the ground."

This is the second emergency measure following the initial urgent management stabilization fund of 500 billion won, which was prioritized and supported from the 5th of last month to assist small business owners and self-employed individuals suffering from fixed cost burdens such as labor costs and rent.

Seoul will first expand the credit supply scale from the existing 3.805 trillion won by an additional 1.285 trillion won to a total of 5.09 trillion won. This will be operated through 2.105 trillion won in loan support (funding support) via the Seoul Small and Medium Business Development Fund and 2.985 trillion won in loan support (guarantee support) through credit guarantees by the Seoul Credit Guarantee Foundation.

To prevent small business owners and self-employed individuals from suffering additional difficulties during financial processing, procedures will be greatly improved, and a cooperative system with commercial banks such as Shinhan Bank and Woori Bank will be established. The process from guarantee screening to support, which usually took two months, will be drastically shortened to within 10 business days from application to deposit into the account.

Starting early next month, dedicated counters will be installed and operated at 564 branches, with dedicated staff assigned to each branch. Additionally, 300 personnel will be massively added to the Seoul Credit Guarantee Foundation for guarantee screening.

However, the Seoul Metropolitan Government explained that since the total number of pending consultation and screening cases has reached 30,405 so far, the backlog must be prioritized and resolved by mid-April.

As Seoul's "COVID-19 supplementary budget" passed the city council the day before, separate support measures such as the Neighborhood Market 119 emergency loan for securing fixed costs like rent and labor, and high-interest refinancing loans to reduce interest expenses will also be implemented immediately.

Mayor Park said, "This second financial support measure is a livelihood finance innovation plan prepared to open the financial lifeline for small business owners and self-employed individuals pushed to the brink by COVID-19 and to enhance convenience in on-site support. We will implement innovative measures that have never existed before in various ways and continuously to overcome this emergency situation and enable the livelihood economy to enter a rapid stabilization phase."

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