Kim Joo-hyun, Financial Services Commission Chairman, "Extension of Small Business Loans is a Measure for Repayment Ability, Not Deferral of Defaults"

Decision to Extend 'Maturity Extension and Repayment Deferral' Measures for the Fifth Time

Financial Services Commission Chairman Kim Ju-hyun is taking a commemorative photo with participants at a meeting related to maturity extension and repayment deferral held on the 27th at the Bankers' Hall in Jung-gu, Seoul. Photo by Moon Ho-nam munonam@

[Asia Economy Reporter Sim Nayoung] On the 27th, Kim Juhyun, Chairman of the Financial Services Commission, announced the extension of the maturity extension and repayment deferral measures for small business owners, stating, "Unlike the previous fourth extension, this soft landing plan is aimed not at simple deferral of defaults but at fundamental recovery of repayment capacity."

At a meeting with the heads of the five major financial holding companies held at the Korea Federation of Banks in Seoul on the same day, Chairman Kim explained, "During the repayment deferral support period, we are proactively preparing normal repayment plans after the recovery of normal business operations, and for borrowers who find normal repayment difficult and require debt adjustment, we have provided options to ease repayment burdens through debt adjustment programs such as the New Start Fund."

The Financial Services Commission decided to extend the 'maturity extension and repayment deferral' measures, which were scheduled to end at the end of this month, for the fifth time. Chairman Kim said, "Unfortunately, the recent unexpected rapid deterioration of economic and financial conditions due to the triple high (high interest rates, high inflation, and high exchange rates) has delayed the recovery of repayment capacity for self-employed individuals and small and medium-sized enterprises."

He added, "If the maturity extension and repayment deferral measures were to end all at once as originally planned at the end of September, there were concerns about large-scale defaults causing not only social shocks but also systemic risks such as the transmission of financial sector insolvency. Therefore, to ensure a soft landing not only for self-employed and SME borrowers but also for the financial sector, maturity extension borrowers are allowed up to three years, and repayment deferral borrowers up to one year to promote business normalization."

Chairman Kim requested the financial holding company heads, "Please ensure that the contents of the system are well communicated down to the branch counters so that today's plan can be operated without confusion on the ground, and thoroughly monitor the implementation status. Also, please reorganize the financial companies' own pre-workout systems so that debt restructuring tailored to the individual characteristics of borrowers can be carried out."

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