Political Circles Urge Extension of COVID Loan Maturity and Interest Repayment Deferral Ending in September

National Assembly Member Kim Kyung-man: Debt Maturity Extension Inevitable Amid COVID-19 4th Wave
COVID Financial Support Amounts to 204.4 Trillion Won... Government Unable to Confirm Extension

[Asia Economy Reporter Park Sun-mi] Voices have emerged in the National Assembly calling for the extension of the financial sector's debt maturity extension and interest repayment deferral measures, which are scheduled to end next month.

Kim Kyung-man, a member of the National Assembly's Industry, Trade, Energy, Small and Medium Enterprises and Startups Committee and chairman of the Democratic Party's Special Committee on Small Businesses (proportional representation), stated, “Since the fourth wave of COVID-19 is still ongoing, extending the debt maturity is inevitable,” adding, “The government should finalize this month whether to extend the debt maturity along with the tax payment deferral plan under review to ease the worries of small business owners.”

On the 5th, Hong Nam-ki, Deputy Prime Minister and Minister of Economy and Finance, announced at the Emergency Economic Central Countermeasures Headquarters meeting, “We are reviewing support measures such as tax payment deferral and social insurance premium deferral for the second half of the year and plan to announce them in August,” but the decision on extending the debt maturity has been postponed until September.

Yesterday, Eun Sung-soo, Chairman of the Financial Services Commission, also stated at a private meeting with financial authorities and the five major financial holding companies, “We have not yet reached a conclusion on whether to extend the COVID-19 financial support scheduled to end at the end of September,” and decided to make a decision after carefully reviewing both positive and negative effects.

According to the Financial Services Commission, from February last year to the end of June this year, the total amount of loan maturity extensions and interest repayment deferrals supported by all financial sectors for small and medium enterprises and small business owners reached 204.4 trillion won, including 192.5 trillion won in loan maturity extensions, 11.7 trillion won in principal repayment deferrals, and 200 billion won in interest repayment deferrals. This accounts for about 17% of the 1,193 trillion won in SME loan balances as of the end of the first quarter of 2021.

However, as the Level 4 social distancing has been in effect for a month, small business owners and self-employed individuals are still facing significant difficulties in their livelihoods. Especially, industries whose main business hours are in the evening have reported sales declines of about 50%, claiming they are on the brink of bankruptcy.

Kim said, “The number of confirmed cases has been in the four digits for a month, and with the high-intensity social distancing of Level 4 in the metropolitan area and Level 3 in non-metropolitan areas extended for two weeks until the 22nd, small business owners are being pushed to the worst situation,” emphasizing, “For small business owners enduring social disasters like COVID-19, extending maturities is basic, and ultra-low interest loans should be provided.”

He also urged, “I hope commercial banks fulfill their social responsibility to the end by extending maturities and reducing interest for small business owners.”

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