[Q&A] Vice Minister of Economy and Finance: "Small Business Loan Channels Expanded... Bottlenecks Will Improve"

Confusion Between Proxy Loans and Direct Loans Confirmed... "Sohnin Gong, Only Conducting Direct Loans to Reduce Confusion"

[Asia Economy Reporter Jang Sehee] Kim Yongbeom, 1st Vice Minister of the Ministry of Economy and Finance, said on the 27th regarding financial support for small business owners, "Since the counters, handling institutions, and guarantee organizations will be significantly expanded compared to now, the bottleneck phenomenon will improve quickly."

Vice Minister Kim held a briefing on the rapid execution plan for financial support for small business owners on the same day and stated, "Not everything will be completed all at once, and since there are some differences such as April 1 and April 6, the field is expected to continue to experience congestion similar to now for about 1 to 2 weeks." He added, "Since loans that have already been applied for must be prioritized for review, it is expected to take some time."

The following is a Q&A between Vice Minister Kim and Kang Seongcheon, Vice Minister of the Ministry of SMEs and Startups.

▲Do you think the bottleneck phenomenon will be resolved with this measure?

=Until now, funds were supplied limited to the Small Enterprise and Market Service (SEMAS), but from April, additional reviews can be conducted through 7,000 branches of commercial banks and 700 branches of Industrial Bank of Korea (IBK). Also, for loans under 30 million won that were handled by the Regional Credit Guarantee Foundation (Jishinbo), IBK will integrate them. Since counters, handling institutions, and guarantee organizations will be significantly expanded compared to now, I believe the bottleneck phenomenon will improve quickly.

▲Which measure do you think will be most effective in helping small business owners?

=Until now, all fund applications were concentrated in one institution because they were only accepted at the Small Business Promotion Center. There was a delay in applications due to the bottleneck phenomenon at the Jishinbo Foundation responsible for guarantees. However, from early April, the application counters will be diversified to IBK and commercial banks. We expect the time intervals to shorten considerably going forward.

▲Confusion occurred from the first day of the pilot operation of direct loans. What preemptive measures were taken in anticipation of this confusion?

=Direct loans started on the 25th, and it is true that there was some confusion initially because both proxy loans and direct loans were mixed on the first day. Going forward, the proxy loan method will be excluded, and only the direct loan method will be operated. Since direct loans do not require regional credit guarantees and are completed only through SEMAS, we expect the confusion on the ground to decrease.

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