Financial Supervisory Service Provides Tailored Support for Young Self-Employed... Loan Interest Rates Reduced with Consulting

Financial Supervisory Service Develops Customized Program for Young Self-Employed with Frequent Business Closures
2021 'COVID-19 Crisis Management Support System' Operation Plan

[Asia Economy Reporter Park Sun-mi] The Financial Supervisory Service (FSS) is launching a customized support program for young self-employed individuals facing difficult conditions due to COVID-19.

On the 23rd, the FSS announced the 2021 "COVID-19 Crisis Management Support System" operation plan, which includes specialized support for young self-employed individuals. First, to assist young people who lack financial knowledge and self-employment experience, a tailored program for self-employed individuals will be established. A new educational program for young self-employed individuals will be created to impart necessary financial knowledge and business know-how to those new to society by analyzing existing success cases. Additionally, a mentoring program will be introduced, appointing experienced self-employed individuals as mentors to provide management advice to young self-employed entrepreneurs.

Practical financial burden relief for young self-employed individuals nurtured through consulting will also be supported. The effectiveness of financial advice will be enhanced by actively supporting policy loan products that fit the business content and characteristics of young self-employed individuals. A plan to offer discounted loan interest rates to young self-employed individuals who complete the consulting program is being pursued.

This support is driven by the recent increase in new startups among people in their 20s and 30s, while the proportion of short-term closures (within three years of startup) among closed businesses is the highest compared to other age groups (55%), highlighting the urgent need for support for young self-employed individuals.

Expanded Crisis Management Support for Self-Employed Individuals

In addition to the customized support program for young self-employed individuals, the FSS plans to further expand crisis management support for all self-employed individuals.

Through a special counseling center, continuous consultation will be provided to vulnerable self-employed individuals who are the actual beneficiaries of government support measures, and a "visiting field communication team" will be deployed to vulnerable groups. By utilizing big data for detailed commercial area analysis and recommending suitable business types, the effectiveness of consulting will be improved to increase the success rate of self-employed individuals. Support will be provided to expand consulting centers in non-metropolitan areas, and active participation will be encouraged through year-end commendations. The expansion of mobile platforms by banks will be promoted, and a comprehensive platform aggregating support information will be established on the FSS website.

To better assist self-employed individuals struggling with debt repayment, banks will strengthen preemptive borrower management, education, and external publicity. After the expiration of maturity extensions and interest payment deferrals, these measures will be guided to serve as effective support tools for borrowers at risk of delinquency.

Meanwhile, to overcome the COVID-19 crisis, the FSS established the "Small Business and Self-Employed COVID-19 Crisis Management Support System" in July last year and has been supporting self-employed individuals in difficulty in cooperation with the banking sector.

The Small Business and Self-Employed Financial Difficulty On-Site Support Team operated a special counseling center and field listening team, handling 13,840 cases of difficulties last year. The banking sector expanded startup-focused consulting to "crisis management consulting," with 16 domestic banks providing a total of 5,202 consultations through dedicated headquarters departments or regional consulting centers (27 locations). Furthermore, by revitalizing the "Individual Business Loan 119" system, preemptive support for borrowers at risk of delinquency was strengthened, and active support was encouraged through performance checks. Last year, the loan amount with reduced debt repayment burden through Individual Business Loan 119 reached 1.0141 trillion KRW, with 14,699 cases supported.

An FSS official stated, "Based on existing achievements, this year we plan to further expand crisis management support for self-employed individuals by increasing total support volume and strengthening customized support," adding, "In particular, we plan to newly establish a customized support program for young self-employed individuals to provide specialized support for those facing difficult conditions."

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