Yongin City Extends COVID-19 Financial Special Guarantee for SMEs to 5 Years

Yongin City Hall

[Asia Economy (Yongin) = Reporter Lee Young-gyu] Yongin City in Gyeonggi Province is extending the financial special guarantee period from 3 years to 5 years for small and medium-sized enterprises (SMEs) that have suffered economic damage due to blocked sales channels caused by the novel coronavirus infection (COVID-19).

On the 20th, Yongin City announced that it signed an agreement on this matter with eight financial institutions including Gyeonggi Credit Foundation, Shinhan Bank, Woori Bank, Hana Bank, IBK Industrial Bank, KB Kookmin Bank, NH Nonghyup, and SC First Bank in the mayor's office.

According to the agreement, these institutions will extend the special guarantee period provided to local SMEs affected by COVID-19 from 3 years (1 year grace period, 2 years repayment) to 5 years (1 year grace period, 4 years repayment), an extension of 2 years.

In relation to this, the city also decided to expand the interest differential compensation period from the existing 3 years to 5 years.

Mayor Baek Gun-gi of Yongin said, "This reflects the situation where local SMEs are having difficulty recovering funds as sales channels to major export countries like China have been blocked," adding, "I am grateful that the Gyeonggi Credit Guarantee Foundation and seven financial institutions quickly consulted, and this will be a great help to local companies."

Earlier, on the 10th, Mayor Baek held a meeting with businesspeople at Jinseong Tech in Idong-eup, Cheoin-gu, to listen to the difficulties of SMEs suffering from the impact of the infectious disease.

At the meeting, companies expressed that not only is it difficult to procure parts, but export channels are also blocked, making fund recovery impossible and urgent financing necessary. In response, Mayor Baek requested an extension of the guarantee period from the Gyeonggi Credit Guarantee Foundation representatives present.

Since the 3rd, the city has been operating a COVID-19 related local SME damage report center and received 71 cases by the 19th.

The city supports guarantees up to a maximum of 300 million KRW per company without collateral depending on the credit and damage scale of the reported companies, and also supports interest rates of 2 to 2.5% per annum.