97% of Small and Medium Enterprises Unaware of or Unable to Use Financial Sector's 'Win-Win Measures'

Korea Federation of Small and Medium Business.

A significant number of domestic small and medium-sized enterprises (SMEs) were found to be unaware of or have no experience using the 'win-win measures' announced by the financial sector.

The Korea Federation of SMEs announced on the 12th the results of the 'SME Fund Status and Financial Usage Difficulties Survey,' conducted from the 5th to the 8th of last month targeting 300 SMEs.

Compared to the same period last year, 54% of respondents answered that their current financial situation was 'similar.' Those who responded 'difficult' accounted for 28%, followed by 'smooth' at 18.0%. Among companies with sales under 1 billion KRW, 58.9% reported their financial situation as 'difficult.' Only 11.1% of companies with sales over 20 billion KRW answered 'difficult' to the same question. It was found that the smaller the scale, the more challenging the financial situation.

Companies with an interest coverage ratio below 1, meaning operating profit is less than or equal to interest expenses, accounted for 51.7%. Among the surveyed companies, 46.1% expected delinquencies if the base interest rate rose by 2 percentage points, indicating an urgent need for measures before problems caused by 'interest expenses' worsen.

Regarding awareness and experience of the win-win measures announced by the financial sector, responses were 'not well aware (73%)', 'aware but unable to use (24%)', and 'aware and using (3%)' in that order. A total of 97% of companies either did not know about or did not use the win-win measures.

Among users of the win-win measures, 70% said 'interest rate reduction' was the most helpful. The main reasons for not using the win-win measures despite knowing about them were 'did not think it would be very helpful (48.6%)' and 'not eligible (33.3%).'

In the survey related to policy funds, 46% of respondents had used policy funds. Among those who used policy funds, 64% were satisfied, and only 6.4% were dissatisfied.

The reasons for dissatisfaction (multiple responses allowed) were 'complex application procedures (66.7%)', 'high guarantee fees (66.7%)', 'insufficient support limits (44.4%)', and 'high interest rates (44.4%)' in that order. The most common reason for not using policy funds was 'not needed' at 52.8%, followed by 'lack of knowledge (18.0%)' and 'excessive paperwork (16.8%).'

Choo Moon-gap, Head of the Economic Policy Division at the Korea Federation of SMEs, stated, “This survey showed that companies with low sales have difficult financial conditions,” and added, “It is necessary to review the operation status of win-win finance and enhance its effectiveness so that SMEs can properly utilize it.”

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