Ministry of SMEs and Startups: "23.2% of Small Business Owners Applying for COVID-19 Guarantees Received Loans"

National 16 Regional Credit Guarantee Foundations Application Volume and Execution Standards

[Asia Economy Reporter Kim Daeseop] The Ministry of SMEs and Startups announced on the 25th that the number of guarantee applications received by 16 regional credit guarantee foundations nationwide related to the novel coronavirus infection (COVID-19) reached 88,729 cases.

This number of guarantee applications was tallied from the 13th of last month to the 23rd of this month. Among these, 38,684 cases have completed screening and guarantee certificates were issued, accounting for 43.6%. The actual number of loan executions using these issued guarantee certificates reached 20,617 cases, which is 23.2%.

In terms of amount, out of the 3.1442 trillion KRW applied for, 1.2365 trillion KRW (39.3%) completed guarantee screening and had guarantee certificates issued. Through these guarantees, loans amounting to 647.2 billion KRW, which corresponds to 20.6% of the total application amount, were executed.

This statistic only covers the portion executed with the budget secured by the Ministry of SMEs and Startups from the COVID-19 management stabilization funds that began on the 13th of last month. The Ministry explained that the currently implemented small business management stabilization funds can be broadly classified into three categories.

First, loans and guarantees are made using the budget secured by the Ministry of SMEs and Startups (including supplementary budgets). Loans and guarantees are also conducted using budgets from local governments (including local government supplementary budgets). Additionally, general loans and guarantees not related to COVID-19 management stabilization funds are also being carried out. All guarantee operations in these situations are handled by the regional credit guarantee foundations.

A Ministry of SMEs and Startups official stated, "The significance of this data lies in the fact that many of those who applied for loans at the Small Enterprise and Market Service had to receive guarantees from the regional credit guarantee foundations, and the majority of those who actually received loans executed them through guarantee certificates from the regional credit guarantee foundations."

The official added, "Currently, the validity period of the guarantee certificates issued by the credit guarantee foundations is 60 days, and since loans can be obtained through banks within the specified period after issuance, there is a difference between the issuance of guarantee certificates and the execution of loans."

The Ministry is also conducting a pilot program for direct loans, which has never been done before, through its affiliated public institution, the Small Enterprise and Market Service. A Ministry official said, "We are currently conducting a pilot operation ahead of the full-scale implementation scheduled for the 1st of next month, and we will make every effort to minimize confusion on the ground and ensure that more people can receive the necessary funds without inconvenience."

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