Gwangju City to Fully Cover Smile Microcredit Interest for One Year for Low-Credit Small Business Owners
by Song Bohyeon
Published 20 Feb.2026 10:47(KST)
Annual 4.5% Interest Subsidy... Budget Expanded to 250 Million Won
Targeting Bottom 20% Credit Scores, Basic Livelihood Recipients, etc., Starting on the 23rd
Gwangju Metropolitan City will provide full support for one year of Smile Microcredit loan interest to low-credit small business owners who cannot pass the threshold of institutional finance. The city will subsidize annual interest of 4.5% for borrowers who repay principal and interest normally, and this year it has nearly doubled the related budget compared to last year.
On the 20th, Gwangju Metropolitan City announced that it will promote the "Smile Microcredit Interest Support Program" to ease the financial burden on small business owners and help stabilize their management. Under this program, if a small business owner who has taken out a Smile Microcredit loan repays the principal and interest normally, the city will cover the interest. Among metropolitan cities, only Gwangju and Busan are implementing this system.
The city will fully support loan interest of 4.5% for one year. This year’s budget has been set at 250 million won, an increase of 110 million won from the previous year. The city expects that this will enable more micro-scale small business owners to receive support.
The beneficiaries are small business owners in the Gwangju area who have taken out Smile Microcredit loans for purposes such as startup funds, operating funds, facility improvement funds, or emergency living funds. Eligible borrowers include those in the bottom 20% of personal credit scores (KCB 700 points or below, NICE 749 points or below), basic livelihood security recipients, near-poverty class, and recipients of the Earned Income Tax Credit.
The support consists of subsidizing in 2025 the interest paid in 2025 by new Smile Microcredit borrowers who take out loans in 2024-2025. Applications will be accepted from the 23rd until the budget is exhausted.
Small business owners who wish to apply can visit one of the seven Smile Microcredit implementing institutions in the Gwangju area (Gwangju Buk-gu Corporation, KB, LG, Samsung, Shinhan, Woori, Hyundai Motor Smile Microcredit Foundation) or the Gwangju Economic Promotion and Win-Win Jobs Foundation, or they can apply online through the Gwangju City Business Support System. Detailed information can be found in the program announcement on the Gwangju City Business Support System.
Last year, Gwangju City provided a total of 116 million won in support to 525 small business owners.
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