[Exclusive] Banks That Promised to Help Small Business Owners... Real Vulnerable Groups Excluded from Support

Seven Conditions Exclude Financial Support
Loans with High Interest Rates or Delinquencies Also Excluded
Agreement Loans and Long-Term Installments Are Also Disqualifying Factors
Only a Small Number of Borrowers Expected to Actually Receive Support

[Asia Economy Reporter Song Seung-seop] It has been found that banks that announced support policies for small business owners internally excluded financially vulnerable groups from the target. Critics point out that this is a kind of showy measure under pressure from financial authorities, making it difficult for small business owners to feel the actual support effect.

According to a document titled ‘High-Interest Loan Interest Reduction Support for Individual Business Owners’ obtained by Asia Economy on the 19th from Hana Bank, seven conditions for exclusion from financial support were summarized and communicated to affiliated bank employees. Since the 11th, Hana Bank has been reducing the interest rate by up to 1 percentage point upon maturity for small business owners whose loan interest rates exceed 7% per annum.

Hana Bank decided to exclude small business owners subject to the highest interest rate (13%) set internally from the support. Generally, loan interest rates increase for financially vulnerable groups with low income and low credit scores. This exclusion condition conflicts with the original support purpose of helping small business owners burdened with high interest rates.

Various agreement loans are also not eligible for support. Small business owners in difficulty generally look into agreement loans first before approaching the bank’s own products because the preferential benefits in terms of interest rates or limits are much greater than those of the bank’s own products. If they received an agreement loan that met the conditions, they cannot receive interest rate reduction benefits.

Small business owners who are under the ‘Long-Term Installment Repayment Program’ were also excluded from the support target. This program supports stable loan repayment for individual business owners who are less than three months overdue or have difficulty extending loans. As of May, the loan interest rates ranged relatively high from 4.78% to a maximum of 10.05% per annum. These small business owners have a strong willingness to repay despite high interest rates but are unable to receive support.

Additionally, overdue borrowers, borrowers registered in credit management information, those disqualified for credit under the bank’s internal regulations, and those who are temporarily closed or out of business also cannot receive support. Accounts receivable secured loans were also announced as ‘not subject to this interest rate reduction support due to their characteristics.’

Regarding this, a Hana Bank official explained, "If the highest interest rate is around 13%, most are overdue borrowers, and we cannot provide interest rate reduction benefits to those who are originally ineligible for additional loans such as overdue borrowers, temporarily closed or out-of-business borrowers, and credit disqualified persons. It could also be considered a breach of trust." The official added, "Also, programs like the long-term installment repayment program and agreement loans already have preferential effects, so they are considered already supported, and double support is excluded." The official further stated, "This program was created on the premise of supporting normal borrowers, and new measures linked to government policies will be provided for overdue borrowers."

Another bank official said, "Banks promoting financial support measures for small business owners inevitably have to set exceptions, and all have similar exception application regulations."

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