Vice Minister of Economy: "500,000 Won Support per Closed Small Business Owner... Focusing on Livelihood Economy Capabilities"

The 26th Innovation Growth Strategy Review Meeting and Policy Review Meeting

Lee Eok-won, First Vice Minister of the Ministry of Economy and Finance, is speaking at the '26th Innovation Growth Strategy Review Meeting, COVID-19 Policy Review Meeting, Korean New Deal Review Task Force, and 20th Price-Related Vice Ministers Meeting' held at the Government Seoul Office on the 30th. July 30, 2021. Photo by Yonhap News

[Sejong=Asia Economy Reporter Son Seon-hee] The government will provide a 'Rechallenge Encouragement Fund' of 500,000 KRW per person by the end of the year to approximately 280,000 small business owners who went out of business due to the COVID-19 crisis. As the COVID-19 quarantine situation has rapidly worsened this month due to the impact of the Delta variant and others, there are serious concerns about the damage to the livelihood economy, so the government plans to focus its efforts on policies directly related to the people's livelihood.

Lee Eok-won, First Vice Minister of Strategy and Finance, presided over the '26th Innovation Growth Strategy Review Meeting, Policy Review Meeting, Korean New Deal Review Meeting, and 20th Price-related Vice Ministers Meeting' at the Government Seoul Office on the morning of the 30th, stating, "We will focus our policy capabilities on the prompt execution of supplementary budget projects to alleviate the difficulties of people's livelihoods as soon as possible." In addition to the Rechallenge Encouragement Fund, closed small business owners will receive step-by-step support such as business closure consulting, store demolition costs, legal advice, re-start education, and commercialization support.

Under the strengthened social distancing measures, a total of 11.2 trillion KRW in 'Three Types of Small Business Damage Recovery Support Funds' will be injected for small business owners pushed to the limit: 4.2 trillion KRW for Hope Recovery Fund, 1 trillion KRW for Loss Compensation, and 6 trillion KRW for Emergency Fund Loans. The Hope Recovery Fund will be quickly paid to about 1.3 million people, approximately 70% of the total 1.78 million eligible recipients, starting from the 17th of next month.

Regarding loss compensation, the government plans to hold a compensation review committee immediately on October 8, when the related law is enforced, and prepare to start payments as early as the end of October. Vice Minister Lee said, "We will simplify the application process and minimize the burden of supporting documents to prevent any inconvenience during the application process."

An emergency fund loan totaling 6 trillion KRW will also be activated. Support for loans to low-credit borrowers will increase by 200 billion KRW to 1.2 trillion KRW, and the interest rate has been lowered by 0.4 percentage points to around 1.5% compared to before.

The rent loan program amounts to a total of 3.8 trillion KRW, including 800 billion KRW for businesses subject to closure orders and 3 trillion KRW for businesses under operational restrictions or in management crisis. The loan limit has been doubled from before to a maximum of 20 million KRW, and a new loan program worth 1 trillion KRW for medium- and low-credit borrowers has been established.

Additionally, Vice Minister Lee stated, "We will select four more areas for the 'Commercial District Renaissance,' which supports markets, shopping streets, and surrounding commercial areas as a package, in October this year, and expand the 'Baeknyeon Gage' (Centennial Stores), key players in the local economy, to about 1,000 this year."

The employment market, which showed signs of recovery in the first half of this year, is again at risk due to the spread of the fourth wave. Vice Minister Lee expressed concern, saying, "If the employment market worsens, the difficulties of vulnerable employment groups such as youth, elderly, and small-scale service workers will increase. Especially, due to the prolonged COVID-19 situation over the past year and a half, companies' capacity for new hires has shrunk, making the employment situation felt by young people in the field even more difficult."

The government has prepared and is implementing 252,000 jobs through the first supplementary budget in March, including youth digital jobs and the National Employment Support System. Additionally, through the second supplementary budget confirmed last week, 142,000 more jobs will be created.

For workers in COVID-19 vulnerable industries such as travel and tourism, the government has expanded the employment retention subsidy from 1.4 trillion KRW to 1.9 trillion KRW and extended the payment period from 180 days to 270 days.

Vice Minister Lee self-evaluated, "By the end of June, employment retention measures were supported for 272,000 people at 37,000 workplaces. Especially, workplaces with fewer than 30 employees account for more than 90% of all supported workplaces, greatly helping employment retention in small businesses."

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