Yongsan-gu Lowers Loan Interest Rates for SMEs, Small Business Owners, and Youth Enterprises to 0% Range

Measures for Public Livelihood and Economy Amid Prolonged COVID-19... Reduced Interest Costs Worth 95.02 Million KRW for 561 Companies

[Asia Economy Reporter Jongil Park] Yongsan-gu (Mayor Seongjang Hyun) has temporarily lowered loan interest rates to the 0% range this year for small and medium-sized enterprises (SMEs), small business owners, and youth enterprises.

This is part of measures to support livelihoods and the economy amid the prolonged COVID-19 pandemic.

The district first reduced the interest rate on the SME development fund loans, worth 20.2 billion KRW, from the previous annual 1.5% to 0.8%, nearly halving it. Additionally, the interest rate on the 11 billion KRW job fund loans for youth enterprises was lowered from 1.2% per annum to 0.8%, a reduction of about one-third.

Through this, interest expenses for 561 loan recipients (including planned recipients) of the district’s SME development fund and job fund (493 SMEs and small business owners, 68 youth enterprises) are expected to decrease by approximately 95.02 million KRW (an average of 170,000 KRW per company).

A district official stated, “Effectively, if the bank’s entrusted commission fee (0.8%) is excluded, the district’s lending interest rate is 0%,” adding, “This will provide even a small help to SMEs, small business owners, and youth enterprises.”

The loan limit for the district’s SME development fund is 150 million KRW per company (50 million KRW for small business owners). The terms are a 2-year grace period followed by 3 years of equal repayments, and the funds can be used for business operations, technology development, facility expenses, and other purposes.

This year, the district allocated 8 billion KRW for the SME development fund and will lend 4.5 billion KRW to 100 companies within this month. Applications for the first half of the year ended last month, and additional applications for the second half (August) will continue.

The job fund loans for youth enterprises have terms of a 1-year grace period followed by 4 years of equal installment repayments, with a limit of 100 million KRW per company (50 million KRW for small business owners). The funds can be used for business stabilization, facility expenses, rental deposits, and other purposes.

This year, the youth enterprise loan fund is 2 billion KRW, and so far, 40 companies have borrowed 1.023 billion KRW. Applications will continue until the 2 billion KRW fund is exhausted. Loan applications can be made at the Shinhan Bank Yongsan-gu Office branch job fund one-stop service counter (☎793-3805).

Seongjang Hyun, Mayor of Yongsan-gu, said, “The district is working hard to ease the difficulties faced by small and medium-sized business owners due to COVID-19,” and added, “Never lose hope and let’s overcome this crisis together.”

Besides lowering loan interest rates for SMEs and youth enterprises, the district plans to lead economic recovery by employing all possible methods, including ▲operating customized bidding information services ▲promoting the Good Landlord Movement ▲improving private contract methods ▲prioritizing purchases of SME products ▲issuing Yongsan Love Gift Certificates ▲supporting businesses visited by confirmed COVID-19 cases.

In particular, the district’s customized bidding information system website (http://yongsan.bidpage.or.kr), which consolidates nationwide bid and contract information, has received positive responses, surpassing 100 member companies within a month of its launch.

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