Ministry of SMEs and Startups Ends '5-Minute Cut' for Policy Funds... Priority Evaluation Replaces First-Come, First-Served

40,000 Applications for Credit-Vulnerable Microbusiness Financing
Increased Support for Low-Credit and Non-Metropolitan Applicants
Support Rate for Low-Credit Applicants Up by 67 Percentage Points

The Ministry of SMEs and Startups has overhauled its 'Credit-Vulnerable Microbusiness Financing' support method, changing from a first-come, first-served application process to a policy priority evaluation system. The new system aims to reduce excessive competition and server overload during the initial application phase, while also expanding support for low-credit and non-metropolitan microbusiness owners.

On May 21, the ministry announced that the number of applications for the Credit-Vulnerable Microbusiness Financing program in April reached approximately 40,000, with about 3,000 of these applications selected for loan review.

The Credit-Vulnerable Microbusiness Financing program is a policy fund that provides up to 30 million won to microbusiness owners with medium or low credit scores (NCB score of 839 or below) who have difficulty using private financial institutions. As of the second quarter of this year, the interest rate for the program stands at 5.04%.

Previously, the program operated on a first-come, first-served basis, closing as soon as the funding quota was exhausted. This often resulted in the application window closing within five minutes of opening and repeated access issues with the policy fund website. As a result, some microbusiness owners had to wait in internet cafes during business hours to apply, and there were concerns that opportunities were concentrated among applicants with better digital accessibility.

To address these issues, the ministry introduced the 'Policy Priority Evaluation System' in April. After a designated application period, applicants are comprehensively evaluated based on factors such as credit score, previous receipt of policy funds, location in non-metropolitan or depopulated areas, and business history, to select those eligible for support.

The ministry first implemented this method during a two-day application window on April 20 and 21, expanding server capacity to more than twice its previous level. As a result, despite receiving more than 40,000 applications, the system operated normally without notable disruptions.

Analysis showed that the proportion of support for low-credit applicants, those outside metropolitan areas, and early-stage entrepreneurs also increased. Compared to the previous first-come, first-served period from January to March, the support rate for low-credit applicants (NCB score of 744 or below) rose by about 67 percentage points. Additionally, 77.1% of selected recipients were from non-metropolitan or depopulated regions. The proportion of early-stage entrepreneurs (less than three years in business) among selected applicants also increased by 25 percentage points to 78.6%. The share of microbusiness owners who had never previously received policy funds also rose by about 12 percentage points to 93.1%.

The ministry plans to conduct loan reviews for the selected microbusiness owners by the end of this month, after which funds will be disbursed. The next round of applications will be held over two days, on June 15 and 16.

A ministry official stated, "This policy reform is intended to reduce inconveniences experienced by microbusiness owners during the application process, while prioritizing support for those who face greater challenges in securing funds. We will continue to improve the system to ensure that policy funds are delivered effectively to the microbusiness owners who need them most."

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