Gyeonggi-do to Create a 'Social Economy Organization' Haven... 55 Billion KRW Support This Year

Gyeonggi Province plans to nurture 100 social economy enterprises called ‘Impact Unicorns’ with annual sales exceeding 10 billion KRW or corporate value over 50 billion KRW by 2026, and will launch a financial support project worth 55 billion KRW this year.

On the 5th, Gyeonggi Province announced that it will carry out four projects this year to support small-scale and financially vulnerable social economy organizations: ▲special guarantees and interest subsidies of 17.1 billion KRW ▲Gyeonggi Social Impact Fund with over 10 billion KRW invested locally out of 27.8 billion KRW ▲special loans and guarantee/loan support projects for social economy organizations worth 23.9 billion KRW ▲and cooperative asset support projects worth 4 billion KRW.

First, Gyeonggi Province will provide special guarantees up to 500 million KRW per company and interest subsidies of 2.5 percentage points over five years through the Gyeonggi Credit Guarantee Foundation. The guarantee scale increased from 12 billion KRW last year to 15 billion KRW this year.

The support targets are small and medium enterprises under the ‘Small and Medium Enterprise Basic Act’ located in the province, including (preliminary) social enterprises, (preliminary) village enterprises, cooperatives, self-support enterprises, social venture companies, standard workplaces for the disabled, and vocational rehabilitation facilities for the disabled, provided they are for-profit businesses. For social enterprises, cooperatives, and consumer life cooperatives, non-profit entities are also eligible.

Loan amounts will be supported up to 500 million KRW per company based on credit guarantee evaluations, with a loan period of one-year grace and four years of equal installment repayment. The loan interest rate is the contracted bank loan rate minus the 2.5 percentage points interest subsidy supported by Gyeonggi Province.

Status of Financial Support Projects for Social Economy Organizations in Gyeonggi-do

Social economy organizations wishing to apply can make a consultation reservation by visiting the Gyeonggi Credit Guarantee Foundation, then apply by visiting the branch in charge of their business location or through the mobile app Easy One. Applications will be accepted until the guarantee amount is exhausted, and after document submission and guarantee screening, execution can be done through either NH Nonghyup Bank or Standard Chartered Korea.

Alongside this, Gyeonggi Province will also actively invest this year in the ‘Gyeonggi Social Impact Fund,’ established jointly with the Gyeonggi Social Economy Center to revitalize investment in social economy organizations.

Gyeonggi Province previously contributed 5 billion KRW last year and attracted 22.8 billion KRW in private funds, creating the Gyeonggi Social Impact Fund worth 27.8 billion KRW. Of this, over 10 billion KRW will be mandatorily invested in local social economy organizations to help solve regional social issues, promote corporate growth, and activate employment.

Additionally, since December last year, Gyeonggi Province has been recruiting companies to participate in the ‘Gyeonggi Province Social Economy Organization Special Loan Project and Social Economy Organization Guarantee and Loan Support Project’ and is also promoting the cooperative asset support project for social economy organizations.

Kim Hana, Director of the Social Innovation Economy Division of Gyeonggi Province, said, "From hearing voices on the ground, the biggest difficulty for social economy organizations was financing," adding, "Gyeonggi Province’s bold financial support policy is expected to help social economy organizations facing difficult management environments and serve as a catalyst for revitalizing investment."

Meanwhile, Governor Kim Dong-yeon of Gyeonggi Province presented four major social economy visions at the ‘Gyeonggi Province Social Economy Showcase’ in October last year: nurturing 100 Impact Unicorn companies by 2026, franchising successful social economy enterprise models, creating a ‘1 trillion KRW preferential purchase market’ with public and private companies, and expanding social economy organizations to 12,000.

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