Junggi Joonganghoe Meets Financial Services Commission to Propose "Additional Extension of Loan Maturities Ending in Late March"

Installation of the 'Geumyung Aero Report Center' and Request for Extension of Secondary Interest Subsidy Loans for Small Business Owners

[Asia Economy Reporter Kim Bo-kyung] The Korea Federation of SMEs has requested the Financial Services Commission to further extend the loan maturity and interest repayment deferral measures for small and medium-sized enterprises (SMEs) and small business owners, which are set to expire at the end of March.

On the 26th, the Federation held a meeting with the Financial Services Commission and proposed ▲additional extension of loan maturity and interest repayment deferral for SMEs and small business owners ▲establishment of a Financial Difficulty Reporting Center for SMEs and small business owners (tentative name) ▲extension of the interest subsidy loans for small business owners.

According to the Federation's survey on 'Opinions on SME Loan Maturity Extension,' more than half of SMEs (54.2%) were aware of the government's loan maturity and interest repayment deferral measures. The policy's impact was significant, with 45.8% reporting that they benefited from these measures.

The Federation also requested an additional extension of the ultra-low interest rate (1.5% per annum) interest subsidy loans for small business owners whose loans mature starting in April. The interest subsidy loan applies a 1.5% ultra-low interest rate to small business owners, with the remaining interest subsidized by the government and others. If the subsidy is discontinued while the COVID-19 situation persists, there is concern that the interest burden on small business owners will increase sharply.

Lastly, they requested the establishment of a 'Financial Difficulty Reporting Center for SMEs and Small Business Owners' to resolve funding difficulties on the ground. The intention is for the Financial Services Commission and the SME sector to jointly establish the center to enhance the effectiveness of policies related to loan maturity extensions and interest repayment deferrals.

Choo Moon-gap, Head of the Economic Policy Division at the Korea Federation of SMEs, said, "The proactive and preemptive efforts by financial authorities, including two rounds of loan maturity extensions and interest repayment deferrals last year, greatly helped many SMEs and small business owners overcome crises."

He added, "Since the damage caused by COVID-19 continues this year, it is necessary to enhance the effectiveness of financial support policies through additional extensions of loan maturity and interest repayment deferrals and the establishment of the Financial Difficulty Reporting Center."

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