[Asia Economy Reporter Kim Daeseop] The Korea Federation of SMEs announced on the 1st that it will extend loan maturities and defer premium payments for three months to alleviate the financial burden on small business owners and SMEs enrolled in mutual aid programs.
This deferral period applies to subscribers of the Small Business and Small Merchant Mutual Aid and the SME Mutual Aid Fund, in response to the spread of the novel coronavirus infection (COVID-19).
The Yellow Umbrella, a mutual aid program for small businesses and small merchants, lowered its loan interest rate by 0.5 percentage points from 3.4% to 2.9% starting from the 13th of last month. Beginning on the 1st of this month, additional support will be provided to defer premium payments for three months upon customer request.
The SME Mutual Aid Fund plans to extend the maturity of loans due from the 1st without requiring additional principal repayments. For companies affected by COVID-19, premium payments will also be deferred for three months.
Park Yongman, head of the Mutual Aid Business Division at the Korea Federation of SMEs, stated, "This measure was prepared to support SMEs and small business owners who are experiencing difficulties in managing funds due to the impact of COVID-19." He added, "The Federation will also do its utmost by establishing an emergency response system for customer service to prevent the spread of COVID-19."
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