Korea Federation of SMEs Expands Loans for Small Businesses Affected by Heavy Rainfall
SME Mutual Aid Fund Loan Interest Rate Reduced by 2% Points
Disaster Confirmation Certificate Must Be Submitted to Regional Headquarters by Local Governments
The Korea Federation of Small and Medium Business (Kbiz) announced on the 21st that it will expand loans from the 'Small and Medium Business Mutual Aid Fund' for small and medium enterprises (SMEs) affected by the recent heavy rains.
For member SMEs affected by the heavy rains, the loan interest rate will be reduced by 2 percentage points, and the monthly premium payments can be deferred for up to 6 months. Those seeking loan support need to submit a disaster confirmation certificate issued by the local government to the regional headquarters in charge of their location.
The Small and Medium Business Mutual Aid Fund is a system operated by Kbiz to prevent bankruptcy and stabilize the management of SMEs. Since 1984, it has supported SMEs by providing loans totaling approximately 12 trillion won.
In particular, after the COVID-19 pandemic, it has provided unsecured loans up to three times the premium payment amount to micro-enterprises that have difficulty obtaining bank loans due to lack of collateral in a high-interest and high-inflation environment. Additionally, if premiums are paid until maturity (3 to 5 years), a maturity interest rate of 3.75% is paid, strengthening its function as a savings product for accumulating a lump sum.
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Lee Chang-ho, Head of the Mutual Aid Operations Division at Kbiz, said, "We hope this measure will help stabilize companies affected by the heavy rains," adding, "Kbiz is supporting small enterprises and small merchants enrolled in the Yellow Umbrella Mutual Aid with interest-free loans up to 20 million won, mutual aid payments, and a 6-month deferral of premium payments to aid in recovery from damages."
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