T-Mef Incident Government Fund Execution Rate Stands at 16.2%

Only 27.5 Billion Out of 170 Billion Won in Small Business Loans
Kim Won Calls for Loan Distribution Reflecting Reality

Assemblyman Kim Won-i making an inquiry.
[Photo by Kim Won-i's Office]

The government is implementing policy loans for small business owners with unsettled payments from TimeF, but as the situation enters its third month, the execution rate of government fund loans is only 16.2%. There are calls for policies that align with the expectations and realities of small business owners.

On the 8th, Kim Won-i, a member of the Democratic Party of Korea (Mokpo), analyzed data submitted by the Small Enterprise and Market Service (SEMAS) and the Small and Medium Business Corporation (SBC). As of the 30th of last month, the number of loan applications for unsettled TimeF payments totaled 1,499 cases. SEMAS, responsible for small business loans, handled 1,104 cases, while SBC, responsible for small and medium enterprises, handled 395 cases.

The actual number of loans disbursed and the total loan amount were 741 cases totaling 27.5 billion KRW for SEMAS, and 288 cases totaling 81.6 billion KRW for SBC. The average loan amount per case was 36 million KRW for SEMAS and 283 million KRW for SBC, indicating that the average loan amount per case for small and medium enterprises is about eight times higher than that for small business owners. Both institutions offer an interest rate of 2.5% per annum.

The problem is that the originally prepared support fund for affected small business owners was 170 billion KRW, but the execution rate since it began in August is only 16.2%. While SBC loans have been executed at 81.6%, applications from small business owners, who tend to have relatively smaller damages, are low.

In cases of micro small business owners or those with damages under 10 million KRW, many prefer to endure the damage or resolve it through other means such as help from acquaintances rather than taking out loans with a 2.5% annual interest rate.

Representative Kim stated, “Allocating 100 billion KRW to loans for small and medium enterprises with damages amounting to hundreds of millions of KRW per case, and 170 billion KRW to small business loans, is a flawed policy design. It is necessary to develop realistic measures, such as further lowering interest rates reflecting the voices of micro small business owners, and to re-examine whether small and medium enterprises with large damages are receiving sufficient support.”

Meanwhile, according to the Financial Supervisory Service’s investigation, the total unsettled amount from TimeF is 1.3 trillion KRW, with about 48,000 affected companies. It is estimated that companies with unsettled amounts under 10 million KRW account for about 90% of the total number of companies. In terms of amount, about 88% of the unsettled amount is concentrated in companies with unsettled amounts exceeding 100 million KRW.

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