SMEs 78.1% "Loan Maturity and Interest Repayment Should Be Further Extended"

Korea Federation of SMEs
Additional Opinions on Loan Principal Repayment Extension and Interest Payment Deferral
51.5% Say "It Should Be Extended Until the End of Next Year"

< Need for Additional Extension of Loan Principal Repayment Maturity Extension and Interest Repayment Extension Measures > / Unit: %

[Asia Economy Reporter Kim Daeseop] Eight out of ten small and medium-sized enterprises (SMEs) believe that the loan principal repayment maturity extension and interest repayment deferral measures should be further extended.

According to the Korea Federation of SMEs on the 22nd, a survey on opinions regarding the loan maturity extension scheduled for September this year showed that 78.1% of the respondents answered that "additional extension is necessary." Most respondents (71.5%) said that "both loan maturity and interest repayment should be deferred simultaneously." The responses for "loan maturity extension" and "interest repayment deferral" were 22.9% and 5.6%, respectively.

The demand for extension was relatively higher among the 'Capital area', 'Wholesale and retail trade', '5 to less than 10 employees', and 'KRW 2 billion to less than KRW 5 billion' groups. Regarding the additional extension period, 51.5% responded that it should be extended until the end of next year. This was followed by "until the first half of next year" (28.1%), "until the end of this year" (13.5%), and "until March next year" (6.9%).

More than half of the respondents (54.7%) were unaware of the government's existing loan principal repayment maturity extension and interest repayment deferral measures. Among the companies that were aware of these measures (45.3%), 61.3% reported that they did not receive support. Only 38.7% said they received support.

The main reason companies did not receive support from the loan principal repayment maturity extension and interest repayment deferral measures was "because it was not the loan maturity period," accounting for 28.9% of the total. This was followed by "the bank did not inform them" (23.7%), "it was not necessary" (13.2%), and "rejected due to exceeding the limit" (10.5%).

This survey was conducted on 274 SMEs utilizing financial institution loans from the 16th to 17th of this month.

Choo Moon-gap, Head of the Economic Policy Division at the Korea Federation of SMEs, said, "Since the damage such as sales decline due to COVID-19 continues in the SME sector, the loan maturity extension (interest repayment deferral) by banks, which is approaching the end of September this year, is absolutely necessary," adding, "Financial authorities should implement additional extension measures until COVID-19 subsides to prevent SMEs from going bankrupt despite being profitable due to temporary liquidity crises."

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