One in Four Small and Medium Enterprises Faces Financial Difficulties During Chuseok... Average Shortfall of 21.7 Million Won

Korea Federation of SMEs 'Chuseok Fund Demand Survey'
Smaller and Domestic Companies Face Greater Difficulties
Only 37.3% Responded to Bonus Payments

[Image source=Yonhap News]

[Asia Economy Reporter Kim Bo-kyung] One in four small and medium-sized enterprises (SMEs) (26.2%) reported difficulties in securing funds for Chuseok.

The Korea Federation of SMEs announced on the 29th the results of a Chuseok fund demand survey conducted from the 10th to the 23rd, targeting 900 SMEs.

As a result, 26.2% responded that they were having difficulties with Chuseok funding. By scale, the smaller the sales and number of employees, the higher the proportion of respondents reporting financial difficulties. Also, domestic companies (27%) reported more financial difficulties than export companies (19.6%).

The causes of financial difficulties (multiple responses) were reported as follows: △ sluggish sales and revenue (67.4%) △ rising prices of raw and subsidiary materials (58.1%) △ increased labor costs (33.5%) △ frozen or reduced delivery payment unit prices (11.0%).

This Chuseok, an average of 157.3 million KRW in funds is needed, but an average shortage of 21.7 million KRW was found. The shortage ratio compared to required funds was 13.8%, indicating a slight worsening of fund shortages compared to last Chuseok (12.6%).

Regarding plans to secure the insufficient Chuseok funds (multiple responses), respondents said they plan to △ collect delivery payments early (47.4%) △ delay payments (28.4%) △ borrow from financial institutions (23.7%), but 24.2% also answered that they have 'no countermeasures.'

Only 37.3% of SMEs responded that they plan to pay Chuseok bonuses (in cash) this year, while 21.8% answered that it is undecided. Regarding Chuseok holiday plans, 96.9% of companies said they would take four days off (the entire Chuseok holiday).

Choo Moon-gap, head of the Economic Policy Headquarters at the Korea Federation of SMEs, stated, "As the increase in the base interest rate is becoming the biggest obstacle to financing due to the burden of financial costs, it is necessary to prepare financial support policies to alleviate the burden of financial costs."

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