Gangnam-gu to Provide 41.4 Billion KRW Interest-Free Loans for SME Development Fund in Second Half of the Year

Expansion of Eligible Businesses Including Restaurants Under 330㎡, 6-Month Principal Repayment Deferral to Revitalize Local Economy

[Asia Economy Reporter Jongil Park] Gangnam-gu (District Mayor Jeong Soon-gyun) will provide interest-free loans from the Small and Medium Business Development Fund amounting to 41.45 billion KRW in the second half of the year to support local small and medium-sized enterprises (SMEs) and small business owners facing financial difficulties due to the prolonged COVID-19 pandemic.

At the beginning of this month, the district revised the "Ordinance on the Establishment and Operation of the Gangnam-gu Small and Medium Business Development Fund" to offer temporary interest-free benefits, and through the third recruitment by July 17, it will support 35.45 billion KRW out of the 41.45 billion KRW allocated for the second half of the year.

According to the amendment, companies executing loans from June to December this year will receive full interest support for one year from the execution date, and companies that executed loans before May will receive support from July until June next year.

Furthermore, by revising the enforcement rules, the list of restricted industries for loans has been reduced, allowing restaurants with a net floor area under 330㎡ and real estate brokerage businesses to apply as well.

Eligible applicants are individuals and corporations within the district who have been registered for more than one year and possess collateral capabilities such as real estate or credit guarantees according to bank credit regulations. Under the terms of a one-year grace period and three-year installment repayment, SMEs can borrow up to 200 million KRW, and small business owners (individual businesses) can borrow up to 50 million KRW.

For more details, inquiries can be made to the Regional Economy Division of Gangnam-gu Office.

Additionally, the district will grant a six-month repayment deferral for companies struggling to repay principal due to deteriorating performance. Eligible companies are those scheduled to repay principal in the third and fourth quarters and can choose between this temporary interest-free benefit and apply to the loan-executing bank by August.

Meanwhile, through a supplementary budget last month, the district significantly expanded this year’s support fund from the original 9 billion KRW to 48 billion KRW, focusing on revitalizing the local economy affected by COVID-19 by supporting 3.55 billion KRW to 37 companies in the first half of the year.

Jeong Soon-gyun, Mayor of Gangnam-gu, stated, “In the era of the ‘New Normal’ centered on small-scale and non-face-to-face activities, we plan to focus administrative efforts on supporting residents’ normal economic activities while preventing the spread of infectious diseases. Although it is not easy to prepare measures against the huge wave of COVID-19, we will steadily overcome the crisis together with our residents.”

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