Seoul City Supports Businesses Affected by Social Distancing... Issues 20% Discount 'Prepaid Gift Certificates'

Available for use in city gathering and business restriction sites such as beauty salons, barbershops, and PC rooms
8 trillion KRW in 0% interest funding support for small business owners... Consultations start from the 28th

On the 21st, as the spread of the novel coronavirus infection (COVID-19) continues in South Korea and quarantine measures equivalent to social distancing level 3 are being considered, a temporary closure notice is posted at a restaurant in downtown Seoul. Photo by Kim Hyun-min kimhyun81@

[Asia Economy Reporter Jo In-kyung] The Seoul Metropolitan Government will issue 'prepaid gift certificates' that offer consumers a 20% discount benefit to ease the financial difficulties faced by small business owners struggling due to the spread of the novel coronavirus infection (COVID-19) and gathering bans.

Seo Jeong-hyeop, Acting Mayor of Seoul, announced on the 23rd through the 'Emergency Measures for Small Businesses Affected by COVID-19' that "starting from the 28th, prepaid gift certificates worth approximately 100 billion KRW will be issued, which can be used anywhere in Seoul." Consumers pay 10% less upfront and receive an additional 10% discount when using the certificates.

These gift certificates can be used at about 200,000 establishments in Seoul that have agreed to participate in prepaid payments, including karaoke rooms, indoor sports facilities, restaurants and cafes, bathhouses, PC rooms, beauty salons, reading rooms, and study cafes, which have been restricted or had their operations limited due to the Seoul Metropolitan Government's COVID-19 emergency measures implemented on the 5th of this month and the Central Disaster and Safety Countermeasures Headquarters' elevation to level 2.5 in the metropolitan area on the 8th.

To encourage prepaid payments, the payment amount must be at least 110,000 KRW per transaction (100,000 KRW paid by the consumer + 10,000 KRW cash support), and the usage period is set until January 31 of next year to stimulate consumption quickly.

Additionally, the city will invest 800 billion KRW to support small businesses and other COVID-19 affected enterprises facing difficulties due to gathering bans and operational restrictions. Loans will be provided up to 30 million KRW without credit screening, with a 0.5% guarantee fee, 100% guarantee ratio, and an annual interest rate of 0.56%.

The support targets 16 industries included in the gathering ban or restriction orders, such as door-to-door sales, restaurants and pubs, private academies, performance venues, reading rooms, sports facilities, bathhouses, wedding halls, and beauty salons. Consultations will begin on the 28th, loans will be issued immediately, and deposits will be made starting from the first week of the new year to ensure swift progress.

For 10,333 stores located in public shopping areas operated by the city, such as underground shopping centers and subway stations, rent will be reduced by 50%, and common management fees including cleaning and security personnel wages will be waived from January to June next year. The city expects this to have a total support effect of 47 billion KRW.

Acting Mayor Seo said, "Small business owners and self-employed individuals who have barely managed to survive are now facing a crisis due to strengthened social distancing measures," adding, "Although this support may not be sufficient to overcome the crisis, we will do our best to ensure that even small amounts of timely support act like rain in a drought."

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