Over 1 Million Loan Deferrals for SMEs and Small Business Owners Affected by COVID-19
[Asia Economy Reporter Jin-ho Kim] Support for extending the maturity of principal repayments and deferring interest payments on loans for small and medium-sized enterprises (SMEs) and small business owners affected by COVID-19 has exceeded one million cases.
According to data received by Rep. Kwan-seok Yoon of the Democratic Party from the Financial Services Commission on the 14th, support for extending loan maturities and deferring repayments for SMEs and small business owners reached approximately 1.06 million cases (including overlapping and multiple supports).
The number of loan contracts that received maturity extension support for lump-sum repayment loans was 955,000 cases (247.4 trillion KRW). Support for principal repayment deferral on installment loans and interest payment deferral on both lump-sum and installment loans were recorded at 86,000 cases (13.6 trillion KRW) and 17,000 cases (230.1 billion KRW), respectively.
The maturity extension and repayment deferral measures were implemented in April last year to support SMEs and small business owners facing management difficulties due to COVID-19 and have been extended three times in six-month intervals.
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The financial authorities are concerned that the prolonged COVID-19 pandemic has worsened the business performance and financial condition of small business owners and self-employed individuals, putting them at risk and increasing the possibility of loan defaults on loans that received repayment deferrals. A Financial Services Commission official stated, "Although the analysis results of small business owners' management and financial status have not yet been released, signs of worsening conditions due to the prolonged COVID-19 pandemic are visible in many places," adding, "Based on the analysis results, we will prepare a 'soft landing' support program after the repayment deferral period ends."
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