Lee Bok-hyun, Financial Supervisory Service Chief, Urges Expansion of Tailored Support for SMEs and Small Business Owners

[Asia Economy Reporter Song Hwajeong] Lee Bokhyun, Governor of the Financial Supervisory Service, requested the financial sector to expand various customized support measures for small and medium-sized enterprises (SMEs) and small business owners facing difficulties.

On the 7th, Governor Lee held a meeting with industry representatives, including heads of financial industry associations, representatives of the Mutual Finance Central Association, and bank presidents, at the Bank Federation in Myeongdong, Seoul, to hear their opinions regarding the smooth landing support for SME and small business borrowers.

Governor Lee pointed out, "Many SMEs and small business owners have significantly increased their loans in response to worsening financial conditions, and the rapid rise in interest rates has led to increased interest repayment burdens, raising concerns about a decline in debt repayment capacity. If SMEs and small business owners fall into insolvency due to liquidity shortages, it will not only place a heavy burden on our economy but also negatively affect the soundness of financial institutions."

He emphasized the urgent need for the financial sector's autonomous role and cooperation. He said, "The government is currently promoting support measures such as the New Start Fund, and the financial sector is also reviewing and preparing its own smooth landing inducement plans. However, since financial institutions best understand the financial conditions and business situations of borrowers, we ask them to take a more proactive role in guiding the smooth landing of SME and small business borrowers."

In particular, Governor Lee urged the expansion of various customized support measures tailored to the characteristics of each financial sector. He stated, "Recently, the banking sector has introduced various support measures such as lowering high-interest loan rates and extending loan maturities for borrowers experiencing temporary difficulties to reduce the financial burden on small business owners. Additionally, banks and savings banks are expanding management consulting programs for small business owners beyond financial support," and asked for continued efforts in this regard.

Governor Lee stressed that the smooth landing of SME and small business borrowers is a very important task not only for the national economy but also for the soundness of the financial sector. He said, "Providing a slight form of assistance, like a 'nudge' (a gentle intervention without coercion), to borrowers who have the willingness to repay debts but are temporarily facing liquidity crises to induce normalization does not conflict with market economy principles. If a long-term partnership with SMEs and small business owners is firmly established, the financial institutions' profit base can become more solid." He added, "The Financial Supervisory Service will also not hesitate to provide necessary support."

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