Second COVID Loan: 21,000 Applications in Four Days

On the 1st, a small business owner affected by the spread of the novel coronavirus (COVID-19) is receiving loan consultation at a commercial bank in Seoul, where a bank loan product was launched for small business owners impacted by the pandemic. Photo by Hyunmin Kim kimhyun81@

[Asia Economy Reporter Kwon Haeyoung] About 20,000 applicants flocked to five banks within four days of the start of the '2nd COVID-19 loan' application. The number of applicants was lower compared to the 1st COVID-19 loan, which had better conditions such as interest rates and limits.

According to the financial sector on the 24th, the number of 2nd financial support loan applications for small business owners pre-registered at the five major banks?KB Kookmin, Shinhan, Hana, Woori, and NH Nonghyup?between the 18th and 21st totaled 20,919 cases, amounting to 209.19 billion KRW. During the first four days of the 1st COVID-19 loan program, which started on the 1st of last month, about 25,000 applications were received daily on average.

This difference is due to the changed conditions of the COVID-19 loans. In the 1st round, loans were available up to 30 million KRW with a fixed interest rate of 1.5% per annum. The maturity was one year. In contrast, the 2nd round reduced the loan limit to 10 million KRW, and the interest rate rose to around 3-4% per annum for medium-credit borrowers. Hana Bank set the upper limit at 2.9% per annum. The maturity is five years.

The Korea Credit Guarantee Fund guarantees 95% of the loan amount, allowing low-credit borrowers to also receive loans. However, a guarantee fee of about 1% must be borne.

Although the number of applications has decreased compared to the 1st COVID-19 loan application period, considering that duplicate applications for the 1st and 2nd rounds are not allowed, it still appears that the funding demand of small business owners struggling due to the impact of the novel coronavirus infection (COVID-19) is significant. There is also a possibility that some speculative demand to secure loans in advance is included.

In addition to the five major banks, Industrial Bank of Korea and Daegu Bank are also accepting applications for the 2nd COVID-19 loan. Loan screening will begin on the 25th.

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