Financial Authorities to Inject 12.5 Trillion KRW into SMEs for Lunar New Year... 10 Billion KRW Provided for Seasonal Goods Payments

Adjusting Loan Maturity and Deposit/Pension Payment Timing... Operation of Mobile and Flexible Branches

Mangwon Market, Mapo-gu, Seoul. Photo by Honam Moon munonam@

[Asia Economy Reporter Lee Kwang-ho] Financial authorities will provide special funds amounting to 12.8 trillion KRW to small and medium-sized enterprises (SMEs) and small business owners facing management difficulties during the Lunar New Year holiday. In particular, they will support traditional market merchants with emergency business funds of 10 billion KRW and advance the payment of card settlement funds for small and medium-sized franchise stores.

The Financial Services Commission announced the 'Lunar New Year Holiday Financial Support Plan' containing these details on the 1st.

First, KDB Industrial Bank and IBK Industrial Bank will support a total of 9.3 trillion KRW, including 3.85 trillion KRW in special loans for the Lunar New Year holiday and 5.45 trillion KRW in maturity extensions, for SMEs in urgent need of funds.

They plan to supply funds by the 26th of this month to ensure there is no gap in operating funds and settlement funds for SMEs. Additional loan interest rate reductions within a range of 0.9 percentage points will also be provided.

The Korea Credit Guarantee Fund will support guarantees worth 3.5 trillion KRW to respond to increased fund needs of SMEs during the long holiday, such as payment settlements and bonus payments. This includes 700 billion KRW in new guarantees and 2.8 trillion KRW in maturity extensions.

The Korea Inclusive Finance Agency will support traditional market merchants with 10 billion KRW for purchasing seasonal goods through microfinance, doubling the amount from last year.

The loan limit is up to 200 million KRW per excellent market merchant association (10 million KRW per store, 5 million KRW for unregistered stores), and the loan period is two months of fund support followed by until June 30. The loan interest rate is within 4.5% per annum (average 3.0%), with equal principal and interest repayments or lump-sum repayment at maturity.

To alleviate financial difficulties of small franchise stores during the Lunar New Year holiday, the payment cycle for franchise settlement funds from card usage will be temporarily shortened. The payment cycle will be advanced from the previous 'card usage date + 3 business days' to 'card usage date + 2 business days' before and after the holiday. The support targets are 370,000 small and medium franchise stores with annual sales between 500 million and 3 billion KRW.

Also, the payment date for card and other usage fees and stock trading settlement will be postponed to the 15th of this month. Loans maturing during the Lunar New Year holiday can be repaid without fees. However, some products may not allow early repayment, so prior confirmation is necessary.

Deposits and pensions scheduled for payment during the Lunar New Year holiday will be advanced to the 10th as much as possible. Payments such as housing pensions and deposits due during the holiday will be prioritized.

Additionally, banks will operate flexible branches at train stations and highway rest areas.

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