Hong Nam-ki: "10 Trillion Won Support for Small Business Loans at 3-4% Interest... Starting Next Month" (Comprehensive)

The 1st Emergency Economic Central Countermeasures Headquarters Meeting and the 15th Economic Relations Ministers' Meeting Held

Hong Nam-ki, Deputy Prime Minister for Economy and Minister of Strategy and Finance. (File photo)

[Sejong=Asia Economy reporters Kim Hyunjung and Joo Sangdon] Hong Namgi, Deputy Prime Minister and Minister of Economy and Finance, announced on the 29th that an additional loan support of 10 trillion won with an interest rate of 3-4% will be provided to small business owners struggling due to the COVID-19 pandemic. Along with this, the government plans to select 10 major industrial sectors such as data, artificial intelligence (AI), and future cars to promote regulatory innovation to overcome the COVID-19 crisis and revitalize the economy.

Deputy Prime Minister Hong presided over the 1st Emergency Economic Central Countermeasures Headquarters meeting and the 15th Economic Ministers’ Meeting at the Gwanghwamun Government Seoul Office that morning and made the announcement.

First, the government recognizes that small business owners are the most affected by this crisis and plans to support them with loans of about 10 trillion won at an interest rate of 3-4%. Previously, the government had prepared a low-interest (1.5%) financial support plan worth 16.4 trillion won and decided on an additional reserve fund support of 315.8 billion won. Hong explained, "We have redesigned and announced the second small business financial support program worth 10 trillion won, and support for small business owners will begin in May. Six major commercial banks will provide loans at 3-4% interest rates based on medium credit ratings with 95% credit guarantee from the Korea Credit Guarantee Fund." He added, "First program beneficiaries will be excluded from the support target to ensure that as many medium and lower credit rating real demanders as possible receive support. The loan application, reception, loan processing, and guarantee screening by the Korea Credit Guarantee Fund will be handled in a one-stop process to simplify procedures."

Additionally, to boost economic vitality, the government will promote regulatory innovation in 10 major industrial sectors: data and AI, future cars and mobility, medical new technologies, healthcare, fintech, technology startups, industrial complexes, resource circulation, tourism, and e-commerce and logistics.

The tasks to be promoted include the introduction of a priority review system for innovative medical devices, expansion of consumer direct-request genetic testing (DTC) items from 56 to 70, rationalization of fintech investment regulations for new technology finance companies (allowing investment), extension of venture company certification period from 2 to 3 years, and the enactment of the Forest Recreation Tourism Promotion Act as a special regulation for mountain area utilization, among 65 selected tasks. Hong emphasized, "This is just the beginning, and we will accelerate additional regulatory reforms in the 10 major industrial sectors. Especially for untact industries such as telemedicine, remote education, and online business, we will focus on regulatory reform and industrial development to turn the crisis into an opportunity."

The 'Korean New Deal,' focused on job creation to prepare for the post-COVID-19 era, will be actively promoted as a national project. It aims to shift from the concept of large-scale civil engineering projects to job creation projects based on the digital economy and the 4th Industrial Revolution. Hong said, "The Korean New Deal is a new job creation project. A representative example will be planning and promoting large-scale IT projects based on digital technology using domestic technology and manpower, leveraging our strengths." He added, "After a brainstorming discussion at today's Central Disaster and Safety Countermeasures Headquarters meeting, the direction and plans for the Korean New Deal will be formally discussed as an agenda item at the 2nd meeting next week."

The government will hold weekly economic Central Disaster and Safety Countermeasures Headquarters meetings to preemptively check and manage domestic and international economic trends and risk factors, as well as discover creative additional measures and disclose them transparently. Hong explained, "We aim to overcome this economic crisis as early as possible by establishing a more systematic and thorough response system and successfully performing 'economic quarantine' to break through the economic crisis. After the meeting, the 1st Vice Minister of Economy and Finance will hold a regular briefing for the public on economic trends and meeting results."

Post-COVID-19 measures will also be discussed through the economic Central Disaster and Safety Countermeasures Headquarters. Hong said, "The economic headquarters will actively devise future visions and measures to respond to the new economic order and industrial structure changes after the COVID-19 crisis, as well as overcome the economic crisis." Specifically, he mentioned fostering new industries such as untact service industries, the combination of social overhead capital (SOC) and digital technology, and responding to the reorganization of global value chains (GVC).

Hong concluded, "Due to the spread of COVID-19, our economy is experiencing the shock in psychological, real, and employment aspects under financial volatility risk. Going forward, economic ministries will boldly decide and swiftly and accurately execute crisis measures centered on the economic Central Disaster and Safety Countermeasures Headquarters."

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