Eun Seong-su's Financial Sector 'Relay Summons' Sparks Flood of SME Support (Comprehensive)

KB Financial Expands Products to Reduce Financial Costs for SMEs
Shinhan Financial Group Chairman Cho Yong-byeong Orders "Prepare Various Support Measures"

[Asia Economy Reporter Park Sun-mi] Eun Sung-soo, Chairman of the Financial Services Commission, has convened the heads of the five major financial holding companies (on the 16th), heads of policy financial institutions (on the 19th), and heads of financial associations (on the 22nd) over the past week to discuss a smooth landing plan for COVID-19 financial support. Since then, gestures emphasizing support for small business owners and small and medium-sized enterprises (SMEs) within the financial sector have been spreading.

According to the financial sector on the 23rd, the loan maturity extension and interest repayment deferral measures for small business owners and SMEs affected by the spread of COVID-19 have been confirmed to be extended for another six months. Chairman Eun succeeded in reaching a consensus to extend the loan maturity extension and interest repayment deferral measures for another six months during relay meetings with financial holding company heads, policy financial institution heads, and financial association heads.

The focus is now on what countermeasures will be created to prevent the borrower's repayment burden from increasing after the deferral measures end. The Financial Services Commission plans to present measures to prepare various long-term and installment repayment methods so that the borrower's repayment burden does not concentrate all at once after the deferral period ends in early March, based on the 'Five Principles for Smooth Landing Support,' which include allowing borrowers to choose the final repayment method and period.

Separately, it is also important how many diverse support programs and services for small business owners and SMEs the financial sector can prepare to provide tangible help to SME customers in their business management. Chairman Eun's request for the financial sector to continue playing an active role in responding to the COVID-19 crisis is based on this background.

[Image source=Yonhap News]

Spread of Support Gestures for Small Business Owners and SMEs

In fact, various support gestures for small business owners and SMEs aligned with the policy direction of the financial authorities have been emerging in conjunction with Chairman Eun’s relay meetings with the financial sector.

Cho Yong-byeong, Chairman of Shinhan Financial Group, held a 'Group Management Meeting' immediately after meeting with Chairman Eun and urged each group company to actively participate in extending the loan maturity extension and interest repayment deferral measures for SMEs and small business owners. He also requested, "Please prepare various support measures so that customers can wisely overcome the difficulties caused by the prolonged COVID-19 situation."

KB Financial Group expanded its existing four types (preferential loans, comprehensive insurance, credit cards, capital) of SME (including individual business owners) exclusive 'ONE KB Corporate Package' by adding three more types (business account, check card, savings bank business loan), launching a total of seven types. The package features enhanced preferential benefits such as exemption from various fees and loan interest discounts to provide practical help for SMEs to overcome management difficulties caused by the economic downturn.

Hana Bank is focusing on efforts to expand support through collaboration with guarantee institutions. For SMEs facing difficulties such as COVID-19 export companies, Hana Bank supports smooth access to guarantee institution loans by signing business agreements and providing contributions to guarantee institutions (Credit Guarantee Foundation, Korea Technology Finance Corporation, etc.), increasing guarantee issuance limits, and supporting guarantee fees.

Policy financial institutions are also moving quickly. Industrial Bank of Korea (IBK), which supplied about 25 trillion won in new funds to small business owners and SMEs last year, is focusing its business this year on supporting the overcoming of the COVID-19 crisis.

Yoon Jong-won, President of IBK, announced plans to expand the proportion of SME loan supply in the first half of the year, stating, "We will continue customized financial support for companies affected by COVID-19 and strengthen financial structure stabilization and business restructuring support for a leap forward in the post-COVID era." IBK recently issued ESG (Environmental, Social, and Governance) certified bonds worth 1.05 trillion won to secure funds to support small business owners and SMEs facing difficulties in financing.

A bank official said, "Banks have been preparing various SME support measures with the recognition that small business owners and SMEs must be saved first to maintain soundness during loan maturity extensions and interest repayment deferrals," adding, "Now that the Financial Services Commission chairman has directly urged the financial sector to 'actively support,' various efforts responding to this will emerge throughout the industry."

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