Bankruptcy Threatened by COVID-19... 'Hope Return' Support for Re-Entrepreneurship

Ministry of SMEs and Startups and Affiliated Organizations
Expanding Inclusive Policy Finance and Re-Startup Education

Photo by Ministry of SMEs and Startups

[Asia Economy Reporter Kim Daeseop] The government is rolling out a series of support measures for small and medium-sized venture businesses and small merchants hoping to bounce back amid difficulties caused by the novel coronavirus infection (COVID-19). The Ministry of SMEs and Startups and its affiliated organizations plan to provide a social safety net through various methods, including contests to promote a culture of re-challenge, inclusive policy financing that fully exempts overdue interest, and expanded re-start education.

According to the Ministry of SMEs and Startups on the 16th, the 'Re-challenge Case Contest' will be held until October 5 this year. This contest was prepared to discover and share experiences of business failure and successful re-challenge cases to spread a culture of re-challenge. Anyone who is a (prospective) re-entrepreneur or has experienced failure can participate.

Participants can submit their own stories in a calm essay format about failures related to technology startups based on innovative business ideas (such as closure, bankruptcy, etc.) or how their failure experience led to a successful re-challenge. Ten outstanding works will be selected based on challenge spirit, empathy, communicability, and storytelling ability. Awards will be presented at the '2020 Re-challenge Day' event scheduled for the end of November this year.

Winners will receive certificates such as the Minister of SMEs and Startups Award along with prize money. Additionally, benefits for re-starting, such as extra points for participation in the 2021 Re-challenge Success Package project, will be provided.

The Small and Medium Business Corporation will launch the 'Special Debtor Reboot' campaign to support the re-start of small and medium venture entrepreneurs who have experienced business failure. This campaign was prepared to provide a social safety net to special debtors through the realization of inclusive policy financing.

The campaign period runs until the 9th of next month. Considering the difficult economic conditions caused by COVID-19, during the campaign period, the special debt reduction rate will be uniformly applied at the highest recognized rate, and overdue interest will be fully exempted.

The Small and Medium Business Corporation has operated a debt adjustment system that reduces special debt by up to 70% (up to 90% for socially considerate subjects), and allows the remaining debt to be repaid in installments over a period of up to 10 years. Special debt refers to loan claims written off due to low recoverability.

The Small Enterprise and Market Service is implementing the 'Hope Return Package Re-start Education' online as part of support for small merchants who have closed or plan to close their businesses. Support is provided by filming educational videos using studios of educational institutions commissioned by the agency or spaces owned by the Small Enterprise and Market Service.

Those who complete the re-start education conducted online can apply for the job encouragement allowance (up to 1 million KRW) once 60 days of continuous employment after job placement is confirmed, just like with on-site education. Small merchants can attend the online education conducted in real-time via computer or smartphone from home or elsewhere.

A Ministry of SMEs and Startups official said, "In these difficult times due to COVID-19, the capabilities of re-startup companies are receiving more attention from a policy perspective," adding, "There is a shift in perception from seeing them as past failed companies to companies that have experienced crises first."

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