Daejeon City Urgently Injects 290 Billion Won to Support Small Business Owners

Daejeon Mayor Heo Tae-jung is announcing the 'Support Measures for Small Business Owners & Consumption Promotion' on the 21st. Photo by Daejeon City

[Asia Economy (Daejeon) Reporter Jeong Il-woong] Daejeon City is urgently injecting 290 billion KRW in disaster relief funds to support local small business owners. This marks the 8th round of disaster relief funds provided using resources independently raised within the region.

On the 21st, the city announced that it has prepared a ‘Small Business Support & Consumption Promotion Plan’ and will distribute Daejeon-type disaster relief funds.

The support budget will be allocated across three areas: cash, financial support, and consumption promotion. First, the city will urgently provide a total of 72 billion KRW in cash disaster relief funds to small business owners struggling due to the prolonged COVID-19 pandemic.

The budget will be borne 70% by the city and 30% by autonomous districts. Businesses in sectors subject to gathering bans will receive 2 million KRW each, those in restricted operation sectors will receive 1 million KRW each, and general sectors experiencing sales declines will receive 500,000 KRW each. The support funds are scheduled to be distributed from April 15 to May 13, with approximately 95,000 businesses expected to benefit.

To ensure the funds are delivered promptly to small business owners, the city plans to utilize accumulated disaster relief payment information and send advance notices to quick payment recipients who can apply without submitting separate documents.

Micro-business owners with annual sales under 300 million KRW will receive separate support for labor costs. This support is provided as 1.5 million KRW (500,000 KRW per month for 3 months) when they hire new employees and maintain employment. The support budget is 1 billion KRW, and payments will begin next month until the budget is exhausted.

One-person self-employed individuals with annual sales under 300 million KRW can receive support covering 30% to 50% of their total employment and industrial accident insurance premiums for three years. The support scale is 100 million KRW, and eligible recipients can receive support from next month until the budget runs out.

In addition to cash support, the city will also provide financial support to small business owners. Key financial support measures include extending repayment deferrals and interest subsidies for existing loans by one year, expanding interest subsidies on management improvement funds (from 2% to 3%, up to 50 million KRW per business), and offering a one-year interest-free special loan (up to 20 million KRW per business, with no interest, no credit check, no collateral, and no guarantee fees).

Consumption promotion events will be held in conjunction with the Ontong Daejeon Companion Sale during the first half of the year. The city plans to conduct the ‘Ontong Daejeon Companion Sale’ from April to May, when the COVID-19 spread is expected to ease somewhat, and increase the Ontong Daejeon cashback rate from the current 10% to 15% (while maintaining the purchase limit of 500,000 KRW) to stimulate consumption using local currency.

In particular, the city will provide additional cashback of 5% for vulnerable consumer groups and 3% for traditional markets and shopping districts, offering cashback benefits that return up to 23% of the amount spent when vulnerable consumers use Ontong Daejeon at traditional markets and shopping districts.

Heo Tae-jung, Mayor of Daejeon, said, “The spread of Omicron and prolonged social distancing have intensified difficulties for local small business owners. The city will focus on injecting the 7th round of Daejeon-type disaster relief funds on the ground to support small business owners and promote consumption, aiming to revive the spark of the local economy.”

Provided by Daejeon City

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