Financial Services Commission Provides Emergency Stabilization Funds to Flood-Damaged Households and Small Businesses

[Asia Economy Reporter Song Hwajeong] Households or small and medium-sized enterprises (SMEs) and small business owners affected by heavy rain can apply for emergency stabilization funds loans or request extensions of maturity and repayment deferrals. They can also receive support such as expedited insurance payments and deferred credit card payment deadlines.

On the 11th, the Financial Services Commission announced financial support measures for households and SMEs affected by the heavy rain.

First, financial institutions such as banks and mutual finance companies will provide emergency living funds to customers affected by flood damage. Financial companies other than banks and mutual finance companies may launch emergency living fund support products later, and the availability of products and funding conditions (interest rates, limits) may vary by company. Shinhan Bank supports new loans up to a maximum limit of 30 million KRW for affected households. The total support limit is 20 billion KRW. NongHyup Bank supports new loans up to 100 million KRW for affected farmers and applies preferential interest rates.

Along with this, banks, savings banks, insurance companies, and card companies will support affected households with loan principal and interest maturity extensions, repayment deferrals, and installment repayments for a certain period (6 months to 1 year).

Life and non-life insurance sectors will prioritize the review and payment of insurance claims for customers affected by the flood and provide early insurance payments. Additionally, they will defer insurance premium payment obligations for up to 6 months and promptly pay loan amounts within 24 hours when insurance contract loans are applied for by affected customers.

Card companies will defer credit card payment deadlines for affected customers for up to 6 months. Some card companies also provide additional support such as installment repayments after the deferral period ends, waiver of late fees incurred after the flood damage, and suspension of collection of overdue amounts.

If individuals affected by the heavy rain fall behind on their debts, they can apply for special debt adjustment through the Credit Recovery Committee (Shinbokwi). Unlike general debt adjustments, they can receive additional benefits such as interest-free repayment deferrals (up to 1 year) and preferential debt reduction (fixed at 70%).

For small business owners and SMEs affected by the flood, policy financial institutions (Korea Development Bank, Industrial Bank of Korea) and banks and mutual finance sectors provide multiple required funds and emergency operating funds. The Korea Credit Guarantee Fund (KCGF) supports special guarantees when affected companies and small business owners apply for recovery fund loans from financial institutions.

Also, policy financial institutions (KDB, Export-Import Bank of Korea, Industrial Bank of Korea) and banks and mutual finance sectors support maturity extensions and repayment deferrals for up to 1 year in addition to existing loans. KCGF extends guarantee maturities for up to 1 year for guarantee products used by affected companies and small business owners.

The Financial Services Commission, Financial Supervisory Service, related financial institutions, and sector-specific associations will form an emergency financial response team for flood damage to comprehensively monitor damage situations and financial support responses. Inquiries about financial support and application procedures can be made through various channels such as the Financial Supervisory Service’s Financial Counseling Center, financial sector associations, and individual financial companies.

To apply for financial support, applicants must first obtain a flood damage confirmation certificate issued by local governments and bring it with them. Even if eligible, the availability and conditions of support may vary by financial company, so applicants should inquire about support details with the relevant financial company or sector association before visiting the financial institution’s counter.

The Financial Services Commission warned that recently, voice phishing (spam) messages impersonating the government, public institutions, and financial institutions to induce phone consultations for loan brokerage or to click on URLs are occurring randomly, urging special caution.

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