Martial Arts: 6 out of 10 Exporting SMEs Face "Worsening Financial Conditions"

Survey of 542 Companies... 12.7% Very Deteriorated, 48.7% Somewhat Deteriorated

The Korea International Trade Association (KITA) announced the results of the "3rd Quarter Trade Industry Financial Difficulties Survey" on the 1st. The survey was conducted on 542 export small and medium-sized enterprises (SMEs) from the 20th to 21st of last month.

12.7% of the companies responded that their overall financial situation had "deteriorated significantly." 48.7% answered that it had "somewhat deteriorated."

The proportion of companies that answered "deteriorated" was 61.4%, which was higher than those who answered "the same" (26%), "somewhat improved" (11.6%), and "significantly improved" (0.9%). This is 4.2 percentage points (p) lower than the 2nd quarter (65.6%).

Container unloading operations are underway at Busan Port's Sinsundae and Gammam Wharf. [Photo by Yonhap News]

Regarding the question about the level of interest burden relative to operating profit, 51.5% of companies reported that "interest expenses are equal to or exceed operating profit." This is 1.7%p higher than the 2nd quarter (49.8%). KITA stated, "The financial burden due to high interest rates remains significant."

Looking at the financial procurement situation by sales amount, 70.2% of companies with sales under 1 billion KRW responded that "funding is difficult." For companies with sales over 30 billion KRW, the figure was 30.8%. KITA noted, "Financial difficulties are concentrated among companies with smaller (sales) scale."

The most urgent issue to resolve financial difficulties was identified as "alleviating interest rate burdens" (79%).

Jung Manki, Vice Chairman of KITA, said, "Due to prolonged high interest rates and sluggish sales, many export companies are already struggling to secure funding. The government and financial institutions should continuously strengthen monitoring and prepare countermeasures."

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