Ministry of Culture, Sports and Tourism Expands Credit Loans for Small and Medium Tourism Businesses

Last year, the travel industry held a rally urging for livelihood measures, including support for operating funds for the travel sector.

[Asia Economy Reporter Choi Dong-hyun] The Ministry of Culture, Sports and Tourism announced on the 19th that it will expand the special loan with credit guarantee for small and medium-sized tourism businesses affected by COVID-19 to a maximum of 130 billion KRW. The application limit and financial conditions such as guarantee screening will also be significantly improved.

The special loan with credit guarantee is a system that provides necessary funds by offering credit guarantees from public institutions (Credit Guarantee Foundation) to small and medium-sized tourism businesses such as travel agencies and hotels, which have been excluded from financial benefits due to weak collateral.

This special loan will provide up to 130 billion KRW, the largest scale since its introduction in 2019. Compared to last year's financial conditions, the application limit has been raised from 150 million KRW to 200 million KRW. Small funds within 20 million KRW will be exempt from guarantee screening. Especially, only for this year, various benefits such as a 0.5 percentage point reduction in loan interest rates and a 0.2 percentage point reduction in guarantee handling fees will be provided. From 2023 onwards, the loan interest rate will increase to 1%, and the guarantee handling fee will rise to 0.5%.

Tourism businesses wishing to receive the special loan can apply for a credit guarantee at regional Credit Guarantee Foundation branches (144 locations nationwide) starting from the 21st, obtain a credit guarantee certificate, and then receive the loan at NongHyup Bank branches (1,138 locations nationwide). Detailed information and conditions of the special loan can be found on the Ministry of Culture, Sports and Tourism website as of the 19th.

A Ministry of Culture, Sports and Tourism official stated, "We hope the tourism industry can overcome the crisis early and further revitalize its management."

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