76% of SMEs Expect This Year's Business Conditions to Be Same or Worse Than Last Year

IBK Industrial Bank, Announces '2022 Small Business Financial Survey'

[Asia Economy Reporter Yoo Je-hoon] Three-quarters of domestic small and medium-sized enterprises (SMEs) expect their business conditions this year to be the same as or worse than last year.

According to the results of the "2022 SME Financial Status Survey" conducted by IBK Industrial Bank of Korea on 4,683 SMEs on the 31st, 76.7% of SMEs responded that their business conditions this year would be the same as or worse than last year.

The demand for funds among SMEs was 42.8% responding that it would "decrease significantly" in 2020 when COVID-19 began, but it has gradually recovered since then, and this year the proportion improved by 30.9 percentage points (p) to 11.9% compared to two years ago.

This year, the demand for new funds for payment of purchase prices and principal and interest repayments increased by 13.2 percentage points and 8.0 percentage points respectively compared to the previous year. On the other hand, the demand for funds for labor costs, facility investment, and research and development investment decreased by 6.2 percentage points, 0.5 percentage points, and 0.6 percentage points respectively compared to the previous year.

Regarding fund management, demand deposit accounts accounted for 82.9%, indicating that SMEs prioritize convenience of deposits and withdrawals when managing financial assets. Additionally, SMEs considering stability increased by 11.3 percentage points to 47.6% compared to the previous year.

An IBK official stated, "As high inflation, high interest rates, and high exchange rates are expected to continue next year, many SMEs are likely to face management crises, so active support for business normalization and resolution of difficulties will be necessary."

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