Cho Hong-rae "Expand production investment to overcome COVID-19... Guarantee limit should be increased"

InnoBiz Association President... Nationwide Branch Visits for Damage Inspection

Cho Hong-rae, President of the Inno-Biz Association

[Asia Economy Reporter Kim Daeseop] "Stimulating consumption is important, but investments to boost the productivity of small and medium-sized enterprises (SMEs) must increase."

Cho Hong-rae, Chairman of the Korea Innovation Small and Medium Business Association (Inno-Biz Association), emphasized the importance of investment to overcome the damage caused by the novel coronavirus infection (COVID-19). This is because active responses are necessary amid serious management difficulties such as decreased sales and financial hardships caused by COVID-19.

In fact, according to a recent survey of 600 SMEs, 76.7% of respondents answered that their current business situation has "worsened" compared to the previous year.

Chairman Cho said, "I have been traveling across the country meeting with representatives of Inno-Biz companies and listening to voices from the field, and many expressed the opinion that the investment guarantee limit should be increased. Even if they want to invest more in research and development (R&D) as part of efforts to overcome COVID-19, they face difficulties in securing additional funds when exceeding the guarantee limits set by existing policy financial institutions."

The number of SMEs experiencing financial difficulties due to the economic downturn and production line shutdowns caused by COVID-19 is increasing. They cite decreased sales from domestic demand contraction, lack of operating funds, and financial pressure as their biggest challenges. In particular, many are unable to receive additional guarantees or loans because they are bound by existing guarantee limits despite financial difficulties.

Chairman Cho emphasized, "We will actively collect opinions from Inno-Biz companies and urge the government and policy financial institutions to increase the guarantee limits."

To assess the damage situation of Inno-Biz companies caused by the spread of COVID-19, Chairman Cho is visiting nine branches nationwide. Recently, he completed visits to the Daejeon, Sejong, Chungnam, Daegu, Gyeongbuk, Gwangju, Jeonnam, Gyeongnam, and Jeju branches. Following the Gangwon branch on the 12th, he plans to continue on-site inspections of all branches including Chungbuk, Jeonbuk, and Busan-Ulsan branches.

The Inno-Biz Association is an organization consisting of technology-innovative SMEs with more than three years of business experience certified by the Ministry of SMEs and Startups under the Small and Medium Business Technology Innovation Promotion Act. Currently, there are about 18,400 Inno-Biz certified companies.

Chairman Cho expressed concern about companies being very cautious due to COVID-19. He said, "Especially at times like this, investments must increase," and is encouraging member companies to actively utilize the association’s smart factory support funds.

The Inno-Biz Association has secured 5 billion KRW in funds and is accepting applications. They are also considering measures to support workforce management and assistance to overcome the damage caused by COVID-19.

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