'Establishment of the Small and Medium Enterprise Financial Support Center'... Eun Sung-soo: "Reflecting Industry Voices in Policy"

Korea Federation of SMEs Holds Meeting to Address Financial Difficulties of Small and Medium Enterprises

Eun Sung-soo, Chairman of the Financial Services Commission [Image source=Yonhap News]

[Asia Economy Reporter Kim Bo-kyung] A center that continuously receives financial difficulties of small and medium-sized enterprises (SMEs) has been newly established. Eun Sung-soo, Chairman of the Financial Services Commission, stated that he will reflect the voices of the SME sector in financial support policies.

The Korea Federation of SMEs invited Chairman Eun on the 29th to hold a plaque ceremony for the 'SME Financial Support Center' and conducted a meeting to resolve financial difficulties of SMEs.

The 'SME Financial Support Center,' established at the Korea Federation of SMEs headquarters in Yeouido, Seoul, serves to consult and receive financial difficulties related to COVID-19 from SMEs and small business owners.

Chairman Eun said, "We expect more active communication with SMEs and small business owners not only through existing consultation channels but also through the 'SME Financial Support Center.'" He added, "We will closely monitor and respond promptly to issues received through dedicated financial sector channels and the center."

During the subsequent meeting, financial issues for SMEs to overcome COVID-19 were discussed. Proposals included ▲expansion of special guarantees for industries affected by COVID-19 ▲establishment of separate credit evaluation criteria for SMEs ▲strengthening competitiveness through SME rehabilitation support ▲enhancement of loan support for women-owned businesses ▲improvement of repayment for long-term guaranteed companies by guarantee institutions.

The SME sector expressed concerns about worsening loan conditions such as interest rate increases due to credit rating downgrades.

In response, Chairman Eun emphasized the need for banks to sufficiently reflect the borrower's recovery potential considering the COVID-19 situation during internal credit evaluations, and to operate in a way that minimizes disadvantages in loan limits and interest rates even if credit ratings decline.

He stated that he will discuss detailed plans with the financial sector to ensure these principles are reflected in financial companies' credit policies. He also said that the issues raised at the meeting and voices from the industry received through the Financial Support Center will be reflected in financial support policies.

Kim Ki-moon, Chairman of the Korea Federation of SMEs, said, "The three rounds of loan maturity extensions greatly helped resolve liquidity crises for SMEs and small business owners." He added, "Continuous cooperation from the Financial Services Commission and the financial sector is necessary for the newly opened 'SME Financial Support Center' to function properly."

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