Mokpo City, Investment to Brighten the Future: 'Financial Support for Young Entrepreneurs'

Loan up to 30 million KRW · 0.99% Interest Rate, Youth Annual Savings of About 460,000 KRW Benefits

[Asia Economy Honam Reporting Headquarters Reporter Jeong Seunghyun] Mokpo City, Jeollanam-do announced on the 1st that it will promote a financial support project to alleviate the initial funding difficulties of young entrepreneurs.

This project, promoted as a pledge of the 7th local government, has been continuously supported since 2019 through an agreement with the Jeonnam Credit Guarantee Foundation.

In this financial support project, if the city invests 200 million KRW, the Jeonnam Credit Guarantee Foundation guarantees 2 billion KRW, which is 10 times the investment. Young entrepreneurs can pay a certain level of guarantee fee (below 1%) to the local credit guarantee foundation and receive a guarantee (up to 30 million KRW), enabling them to obtain loans from financial institutions at low interest rates.

Until last year, the city invested a total of 400 million KRW for the seed money support project for young entrepreneurs and guaranteed 4.15 billion KRW to 188 young entrepreneurs.

Through this, young entrepreneurs who received loans were able to reduce their annual financial costs per person by 469,000 KRW (interest 380,000 KRW, guarantee fee 89,000 KRW).

This is because using the general guarantee applies an average interest rate of 2.71% and a guarantee fee rate of 1.2%, but by using the seed money support project, only an average interest rate of 0.99% and a guarantee fee rate of 0.8% need to be paid.

According to a survey conducted by the city and the Jeonnam Credit Guarantee Foundation targeting 188 project participants, despite market deterioration due to the COVID-19 impact, the majority responded that there was an effect on increasing sales and improving profitability, indicating that the seed money support project functions positively for the survival and job retention of young entrepreneurs.

Jang Seunghyeok, CEO of Daldalcheongnara, which opened in June 2019 and sells handmade bellflower syrup, kumquat preserves, and three types of Mokpo snacks, said, “In the early stages of startup facing funding difficulties, I purchased materials and expensive equipment through the seed money support project, and reducing financial costs was a great help.”

Baena-young, CEO of Yoniyoni, which operates a reservation-based kids baking class at Cheongchun Village Oshowing, said, “It helped stabilize funds in the early stages of startup,” and added, “It is a necessary project for young entrepreneurs who have difficulty obtaining loans initially.”

A city official stated, “We will continuously discover and promote support policies that practically help the dreams and passion of local youth going through difficult times due to COVID-19, creating an environment where young people can work freely.”

For more details regarding this matter, please contact the Jeonnam Credit Guarantee Foundation.

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