On Jul. 25, SK FSC issued SME support plans worth KRW41.2 trillion.
SK FSC announced customized financial support for self-employed, small businesses.
Plan to provide KRW41.2 trillion worth of financial support programs over two years.
Follows Mar. 2022, SK FSC extended support for small merchants, see #132969.
Also follows SK FSC Jul. 20, 2022 propose revisions re new start fund, see #144042.
Key Support Measures
Funding worth KRW10.5trn in Covid-19 special guarantee, interest burden reduction programs, etc. to supply liquidity to self-employed business owners, small merchants.
Support worth KRW29.7trn for launching business, expansion or facility investment.
KRW1trn for restarting, converting businesses to help with recovery, restart efforts.
Future Plans
Most of funding support including Covid-19 special guarantee available from Jul. 25.
Programs requiring renewal in computer network system, including lending support program for borrowers with high-credit background, expanding interest rate reduction for Haeneri loan, and offering a contactless loan option, available from Aug. 8.
Credit guarantee support program for businesses that have commercial partnership with platform service providers is expected to go into effect in Dec. 2022.
Aug. 8, 2022 SK KFB Raise Loan Limit
On Aug. 8, 2022, SK KFB and Korea Credit Guarantee Fund (KODIT) raised loan limit.
For Hope Plus credit loan, a low-interest financial support program for self-employed and small business owners with high credit standing, to KRW30mn from KRW10mn.
In addition, the target of the Hope Plus loan support was expanded to cover not only recipients of the quarantine subsidies but also to recipients of loss compensation.
Changes will apply from the same day, and applications can be made at 14 banks.
Follows SK FSC Jan. 2022 update on availability of Hope Plus credit loan from Jan. 24.
SK KFB issued clarification on debt adjustment program on same day, see #145332.
A low interest rate refinancing program to the tune of KRW8.5trn will help alleviate the burden of high interest rate loan payments for the self-employed and small merchants.
Published release covers eligibility re entity, business, and loan types; application procedure; program details; related future plans incl. sector business agreement.
New start fund is intended to ease debt payment burden of Covid-affected business owners, as they have suffered unavoidable losses while cooperating with restrictions.
Program gives support for collateralized/guaranteed loans, as small businesses tend to have less credit loans (13%) but more collateralized (75%)/guaranteed (12%) loans.
Borrowers who are unable to repay and become defaulters are supported by a principal adjustment of 60-80%, only for excess credit liabilities that exceed property value.
Loan repayment period extended so the loan can be divided and repaid up to 10 years.
If the borrower has difficulty in repaying loan, high-interest adjusted to medium-low.
New startup fund implemented from Oct. 2022 (provisional); call center for detailed guidance and consultation planned for mid-Sep. 2022.
Set to be launched on Oct. 4, 2022, borrowers in need of debt restructuring may apply for a change in the debt payment terms via online platform or offline on-site counters.
SK FSC also warned people of potential frauds such as voice-phishing and loan scams, that may pretend to be benefits from the new start fund, but are in actuality cons.
SK FSC introduced SME refinancing program on the same day, see #149128.
Oct. 4, 2022 New Start Fund Launching Ceremony
On Oct. 4, 2022, SK FSC and Korea asset management corporation, with 19 other financial organizations, held a launching ceremony to inaugurate the new start fund.
Borrowers in need of debt structuring may now apply for a change in their debt payment terms via the 76 on-site counters located nationwide or the online platform.
Oct. 4, 2022 Specialist Credit Improvement Firm
On Oct. 4, 2022, SK GVT designated the new start fund company limited as the entity to specialize in aiding borrowers who are under restrictions from credit transactions.
Restrictions may be due to low credit ratings or lacking financial capabilities, tasks such as purchasing insolvent bonds, adjusting interest rates, deferring payments.
Oct. 21, 2022 Inspection Meeting
On Oct. 21, 2022, SK FSC, SK FSS held an inspection meeting re the implementation status of the new start fund, maturity extension, and deferral of repayment.
Discussed ways to increase convenience for applicants of the new start fund, and establish a system for additional review of the scope of recognition of bad borrowers.
Decided to strengthen support for small business owners and the self-employed.
In Jan. 2023, SK FSC extended the hope plus credit loan by a year, see #159098.
Mar. 2023 Program Expansion
On Mar. 9, 2023, SK FSC decided to expand the low interest rate refinancing program, to all sole proprietorships and small business that are operating business normally.
Expand the limit to KRW 100mn for individuals, and KRW 200mn for corporations.
Loan repayment restructure will be changed to 7-year installments after 3 years.
Application deadline will be extended from the end of 2023 to the end of 2024.
In Mar. 2023, FSS said it will support one-stop loan refinancing system, see #166701.
In Apr. 2023, SK CB decided to unify the SME lending ratio system, see #169170.
In Aug. 2023, SK FSC, SK KFB issued low-interest refinancing program, see #183150.
On Jan. 24, 2024, FSC, FSS issued delinquent loan improvement plan, see #199086.
