[Asia Economy Reporter Jo Gang-wook] Starting from the 1st of next month, small business loans under 30 million KRW can be applied for at Industrial Bank of Korea (IBK).
On the 27th, the Financial Services Commission announced a joint plan with related agencies titled 'Rapid Execution Plan for Financial Support to Small Businesses in Response to COVID-19' and stated that loans under 30 million KRW, previously handled by the Korea Credit Guarantee Fund, will be entrusted to IBK to resolve the loan application surge.
Accordingly, IBK will begin accepting applications for small loans under 30 million KRW from small business owners with credit ratings between 1 and 6 starting April 1st. Loan reviews will commence from April 6th.
A total of 5.8 trillion KRW in funds will be provided at an ultra-low annual interest rate of 1.5%.
The Financial Services Commission explained, "For small loans under 30 million KRW, credit reviews by the Korea Credit Guarantee Fund will be entrusted to IBK, and loan guarantees will be conducted simultaneously to shorten the execution period to about five days."
The Commission expects that during the initial implementation phase, it will take about 2 to 3 weeks to clear the accumulated volume, but normal processing times (around five days) will be restored by late April.
To this end, an inter-agency business agreement will be revised within this month, with the Korea Credit Guarantee Fund and the Korea Technology Finance Corporation actively providing guarantees for ultra-low interest loans. The Korea Credit Guarantee Fund will entrust guarantees under 30 million KRW to IBK, and the Korea Technology Finance Corporation plans to expand the target through relaxed evaluations.
The guarantee limits are 1.9 trillion KRW for the Korea Credit Guarantee Fund, 900 billion KRW for the Korea Technology Finance Corporation, and 2.9 trillion KRW for the Korea Credit Guarantee Fund.
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