[Q&A] Kim Gi-moon "Loan Maturity Should Be Extended... Serious Accident Punishment Act Also Needs Improvement"

Kim Ki-moon, Chairman of the Korea Federation of Small and Medium Business, is delivering opening remarks at the New Year's press conference held on the 9th at the Korea Federation of Small and Medium Business in Yeongdeungpo-gu, Seoul.

[Asia Economy Reporter Donghyun Choi] Kim Gi-moon, Chairman of the Korea Federation of SMEs, urged on the 9th that "the maturity of SME loans scheduled for the end of March should be further extended."

At a New Year's press briefing held at the Korea Federation of SMEs in Yeouido, Seoul, on the morning of the same day, Chairman Kim stated, "Last year, major domestic banks recorded record-high earnings, so there should be no reason not to extend loan maturities."

Chairman Kim also expressed the need for improvements regarding the 52-hour workweek system. He said, "There is a lot of discussion about the 52-hour workweek in the political sphere, but many do not fully understand it. Some flexibility is needed, like in Japan, where labor and management can agree to allow up to 100 hours per month."

He also criticized the Serious Accident Punishment Act, which was enforced on the 27th of last month, as being excessive. Chairman Kim said, "There are already penalty provisions under the Industrial Safety and Health Act, but the Serious Accident Punishment Act sets minimum penalty standards, which is problematic," emphasizing, "We are asking for legislative amendments to address these toxic clauses."

Below is a Q&A session with Kim Gi-moon, Chairman of the Korea Federation of SMEs.

- Since last year, the Federation has been consistently identifying policy tasks and delivering them to the political sphere. What has been the response from presidential candidates so far?

▲ Since it is election season, presidential candidates are receptive to the opinions of the SME sector. The important thing is the action plan on what they will do after being elected. We plan to dispatch Federation executives to the presidential transition committee, which will be formed immediately after the election, to ensure that SME pledges are included in the next government's agenda. Leading candidates from both ruling and opposition parties have all agreed to this.

- What is the Federation's stance on the 52-hour workweek system and the Serious Accident Punishment Act introduced by the current government?

▲ There is a lot of discussion about the 52-hour workweek, but few people fully understand it. Even presidential candidates and politicians do not grasp it well. We are asking for flexibility to allow excess working hours to be used flexibly within a month. In Japan, labor and management can agree to allow up to 100 hours per month. We want such rigidity to be relaxed. Regarding the Serious Accident Punishment Act, there are penalty provisions under the Industrial Safety and Health Act, but the problem is that the Serious Accident Punishment Act sets minimum penalty standards. This creates significant anxiety for business owners. Legislative amendments are needed to address these toxic clauses.

- The current government has set a basic policy not to extend the maturity of SME loans expiring at the end of March. Meanwhile, SMEs and small business owners are demanding an extension. Does the Federation have any solutions to this issue?

▲ The four major domestic banks posted record-breaking earnings last year. They also significantly reduced their loan loss provisions. Since there is no insolvency, there is no reason not to extend loan maturities. During the IMF crisis and financial crisis in the past, many sound SMEs went bankrupt due to indiscriminate fund recalls. We hope banks will consider this aspect. We need to coexist and prosper together.

- You have advocated for allowing the introduction of multiple voting rights for venture companies. However, the ruling party has put a brake on this, saying the bill needs to be supplemented. What is the Federation's position on this?

▲ Many ventures and startups with low equity capital have lost their companies to large corporations through investments. In such cases, the founders' management will often disappear, and many companies end up closing. This creates unfair situations. The proposed bill sets the duration of multiple voting rights at 10 years, and shareholder damage is minimal. Soon, SME organizations will unite to deliver related opinions.

- What are the solutions to the polarization between large corporations and SMEs?

▲ There is a need to introduce a 'delivery price linkage system' that mandates raising delivery prices when major raw material price indices rise by more than 3%. It is also important to change the culture so that large corporations and SMEs recognize that they grow together. Penalties such as a 'three strikes and out' system should be considered for malicious companies.

- Regarding carbon neutrality, are there any matters that the Federation plans to guide or support SMEs on?

▲ The biggest problem is the rise in raw material prices. Electricity rates will also increase. I heard that POSCO raised prices three to four times last year. If SMEs cannot bear the price increases, the government should create good support measures.

- ESG (Environmental, Social, and Governance) is expected to strongly impact the SME sector this year. Does the Federation have any response plans?

▲ Many companies are not yet prepared for ESG and do not fully understand it. We aim to help them understand these aspects thoroughly and to draw out substantial government policy support. We are continuously working to include ESG in the next government's pledges and agenda.

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