Seocheon Fire Emergency Stabilization Fund Support for Households and Small Businesses... Loan Maturity Extended by 1 Year

Emergency Management Stabilization Fund Support, Loan Maturity Extension and Repayment Deferral
Financial Authorities Implement Detailed Financial Support Measures
Operation of Financial Counseling Center for Prompt Damage Consultation and Support Guidance

[Image source=Yonhap News]

The financial authorities, together with the financial sector, will provide emergency stabilization funds, extend existing loan maturities, and offer repayment deferrals to households, small business owners, and SMEs affected by the large fire at Seocheon Special Market. A financial consultation center will also be operated for prompt damage counseling and support guidance.

On the 24th, the Financial Services Commission announced that, separate from the declaration of a special disaster area, it will immediately establish a damage support financial consultation center composed of the entire financial sector and swiftly prepare and implement various financial support measures for damage relief.

First, for households affected by the fire, support measures include ▲emergency living stabilization funds from the financial sector ▲extension of existing loan maturities and repayment deferrals ▲insurance premium payment deferrals and expedited insurance claim payments ▲credit card payment deferral ▲special debt restructuring for overdue debts.

Kookmin Bank, Woori Bank, and Shinhan Bank will provide emergency living stabilization funds of up to 20 million KRW to individual merchants affected. Hana Bank will offer up to 50 million KRW in emergency living stabilization funds to affected individual merchants, and Suhyup Bank will provide emergency livelihood funds with loans up to 20 million KRW per verified affected customer.

Support for loan principal and interest maturity extensions from 3 months to 1 year, repayment deferrals, and installment repayments will also be provided. Kookmin Bank will offer maturity extension support (with preferential interest rates up to 1.5%p) and waive overdue interest. Hana Bank will allow maturity extensions for up to 1 year, repayment deferrals for up to 6 months, and reduce loan interest rates by up to 1.3%p.

Life and non-life insurance sectors will prioritize the review and payment of insurance claims for fire-affected customers and provide early insurance payouts. The obligation to pay insurance premiums for fire-affected customers will be deferred for up to 6 months.

Additionally, BC Card will defer credit card payment claims for fire-affected customers for up to 6 months. Other card companies will provide additional support such as installment repayments after payment deferral ends (Samsung, Shinhan), waiver of overdue fees incurred after the fire (Woori, Hyundai, KB Kookmin), suspension of overdue debt collection (Lotte, Woori, Hana, Hyundai), and installment repayments (Hana).

Furthermore, individuals affected by the fire who have overdue debts can apply for special debt restructuring through the Credit Recovery Committee. Unlike general debt restructuring, this offers additional benefits such as interest-free repayment deferrals (up to 1 year) and preferential debt reduction (fixed at 70%).

Support of 'Management Stabilization Funds' for Fire-Affected Small Business Owners and SMEs

[Image source=Yonhap News]

Policy financial institutions including the Korea Development Bank and Industrial Bank of Korea, as well as banks and mutual finance institutions, will provide restoration funds and emergency operating funds to affected companies and small business owners. The Korea Credit Guarantee Fund plans to support special guarantees when affected companies and small business owners apply for restoration fund loans from financial institutions.

The Korea Development Bank and Industrial Bank of Korea will provide emergency operating funds to affected companies, and the Korea Credit Guarantee Fund will support special guarantees (guarantee ratio increased from 85% to 90%, fixed guarantee fee rate of 0.1%). Commercial banks such as Kookmin, Shinhan, Woori, and Hana will provide emergency operating funds (up to 500 million KRW) and special preferential interest rates to affected merchants.

In addition, policy financial institutions, banks, and mutual finance institutions will support maturity extensions and repayment deferrals for up to 1 year on existing loans of affected companies and small business owners. The Korea Credit Guarantee Fund and the Agricultural, Forestry and Fisheries Credit Guarantee Fund will extend guarantee maturities for up to 1 year on guarantee products used by affected companies, small business owners, and disaster-affected farmers and fishermen.

If small business owners who were previously affected by COVID-19 inevitably fall behind on debts due to this fire, they may receive debt restructuring support including interest reductions through the currently implemented New Start Fund (a tailored debt adjustment program for self-employed and small business owners). Those who operated businesses between April 2020 and November 2023 are eligible.

Meanwhile, the Financial Services Commission plans to form an emergency financial response team for the Seocheon Market fire damage, including the Financial Supervisory Service, related financial institutions, and sector-specific associations, to comprehensively monitor damage situations and financial support responses.

The Financial Services Commission advised, "To apply for financial support, you must first obtain a disaster damage confirmation certificate issued by the local government and bring it with you," and added, "Recently, voice phishing (spam) messages impersonating the government, public institutions, and financial institutions to induce loan brokerage consultations or URL clicks have been occurring randomly, so special caution is necessary."

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