[2020 National Audit] Park Young-sun: "We Will Strive to Unify the COVID-19 Small Business Loan System"

Assemblyman Dongju Lee: "SBC Issues Over Three Times the Budgeted Amount of COVID-19 Business Stabilization Fund Certificates"

Lee Dong-joo, Member of the Democratic Party of Korea. Photo by Lee's Office

[Asia Economy Reporter Moon Hyewon] Park Young-sun, Minister of SMEs and Startups, announced on the 8th that she will focus on unifying the loan system for small business owners who have been directly hit in sales by the novel coronavirus infection (COVID-19).

At the Ministry of SMEs and Startups' audit held by the Industry, Trade, and SMEs Committee at the National Assembly on the same day, Minister Park responded to the criticism by Lee Dong-joo, a member of the Democratic Party of Korea, that "the COVID-19 management stabilization fund certificates issued by the Small Enterprise and Market Service exceeded three times the allocated budget."

Minister Park said, "I believe that the unification of the (small business loan system) is absolutely necessary for the leap to a digital economy," adding, "For this, the cooperation of the National Tax Service, which knows the sales of small business owners most accurately, is essential. We collaborated for the first time during this Chuseok holiday in providing the New Hope Fund support and achieved significant results. We will continue to strive for subsequent unification."

According to the "Status of Execution Amount Based on the Issuance of COVID-19 Management Stabilization Fund Certificates" submitted by Lee from the Small Enterprise and Market Service, the policy fund support target certificates issued during proxy loans for the COVID-19 management stabilization fund amounted to 185,447 cases, totaling approximately 9.6 trillion KRW. This is more than three times the allocated budget of 3 trillion KRW.

However, the actual number of executed cases was only 58,000. 67% of small business owners who received the policy fund certificates did not receive the management stabilization funds. In other words, 7 out of 10 small business owners who received the policy fund certificates did not get loans.

Lee said, "On the ground, there was an explosion of complaints and confusion as loans were not granted despite the issuance of policy fund certificates, and in fact, the regional credit guarantee foundation reportedly received death threats from complainants," adding, "The amount of policy fund support is decided by the guarantee institution, the regional credit guarantee foundation, or the lending banks, making the Small Enterprise and Market Service’s policy fund support target certificates not only useless but also causing confusion on the ground."

He further stated, "The small business loan system must be unified to minimize confusion on the ground."

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