Financial Supervisory Service Chief: "Banks Must Actively Support SME and Small Business Borrowers"

Meeting with SMEs and Small Business Owners at IBK Headquarters on the 19th
Request for Support Including Debt Repayment Deferral and Loan Interest Rate Reduction

On the 19th, Lee Bok-hyun, Governor of the Financial Supervisory Service, held an on-site meeting at the IBK headquarters with representatives from the financial sector and small and medium-sized enterprises (SMEs) and small business owners.

Governor Lee stated, "In a situation where the difficulties of SMEs and small business owners are intensifying due to the aftermath of COVID-19, high interest rates, and economic slowdown, it is a time when financial companies need the wisdom to actively assist SME and small business borrowers experiencing temporary liquidity crises so that we can coexist and prosper together in the long term."

The delinquency rate across the entire financial sector rose from 0.43% at the end of 2021 to 0.86% at the end of March 2023 for individual business owners. For SMEs, it increased from 0.30% at the end of June 2022 to 0.45% at the end of March 2023.

IBK is operating the "SME Recovery Support Program," which provides debt restructuring support such as debt repayment deferrals and loan interest rate reductions to SMEs capable of normalization. Among these, the "Vulnerable Business Operators' Leap Forward Program" is a program where the bank selects target companies (with total credit under 1 billion KRW) before the companies apply, supporting 25.1 billion KRW across 251 companies.

The National Agricultural Cooperative Federation (NongHyup) supports vulnerable borrowers facing temporary financial difficulties by offering maturity extensions, waivers of early repayment fees, and principal repayment deferrals. For borrowers with concerns about delinquency or short-term delinquency (less than 3 months), it also allows refinancing or contract renewals, interest rate reductions, and postponement of collateral execution.

Small business owners and SME borrowers, including the Small Enterprise and Market Service, shared their financial difficulties. The chairman of the Small Business Federation said, "There are still many borrowers with COVID-19 repayment deferrals who are struggling, so support is necessary." SME and small business borrowers suggested, "Practical support that can be felt, such as easing interest burdens and providing operating funds, should be expanded, and cooperation among creditor banks during workouts should be strengthened."

IBK stated, "To provide substantial support to SMEs and small business owners, we are promoting a total interest rate reduction of 1 trillion KRW* over three years," adding, "From 2023 to 2025, we will operate an integrated SME interest support package including special funds with fixed low interest rates, low-interest credit loans, and low-interest special guarantees."

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