"Urgent Needs but Reservations... Early Morning Loan Counters Crowded"

[Report] Visiting the Small Enterprise and Market Service Seoul Seobu and Nambu Centers in Person

On the morning of the 30th, small business owners are lining up in a long queue at the Seoul Western Center of the Small Enterprise and Market Service for direct loan consultations.

"I run a convenience store near Guro Digital Complex, and I've been standing in line for two days. Today, I came out at 3:30 a.m.," "I heard they accept applications through a pre-reservation system, but I don't know how to use it, and if I don't act quickly, it won't work. Since time is urgent, it's better to come here and wait in line," "I heard it's difficult to get a loan because of a low credit rating, but I have nowhere else to turn, so I came out early in the morning feeling frustrated."

The government has introduced the 'Small Business Financial Support Rapid Execution Plan' to reduce the inconvenience faced by small business owners struggling due to the impact of COVID-19, but the sight of people lining up early in the morning to borrow money has hardly improved. Although the loan supply channels have been expanded to include commercial banks and IBK Industrial Bank of Korea based on credit ratings, and a pre-reservation system has been established, the situation on the ground remains chaotic.

Even early on the morning of the 30th, the lines of small business owners waiting to receive 'COVID-19 direct loans' did not disappear. At the Small Enterprise and Market Service (SEMAS) Seoul Western Center, responsible for Gangseo-gu, Yangcheon-gu, Guro-gu, Yeongdeungpo-gu, and Geumcheon-gu in Seoul, more than 30 small business owners were already lined up by 7 a.m. A self-employed person in his 70s who had been waiting since 6 a.m. said, "There is distrust that money won't be lent to those who can't repay," adding, "The long screening period is probably because of that."

Before the start of business hours, SEMAS Seoul Western Center was busy checking the credit ratings of small business owners waiting in advance. Kim Sun-hee, head of SEMAS Seoul Western Center, said, "I arrived before 7 a.m. I heard the first person started waiting from 3:30 a.m., and it seems to be getting earlier," explaining, "We check credit information first because those who do not meet loan requirements should not keep waiting."

The situation at SEMAS Seoul Southern Center was somewhat better. Around 9 a.m., about 4 to 5 small business owners were waiting for the center to open. There, they gave waiting tickets and return visit times to small business owners who came early in the morning and sent them back. A Southern Center official explained, "Early visitors have their required documents checked and are given waiting tickets before being sent back." The official added, "Efforts such as expanding channels and operating a pre-reservation system have somewhat reduced the waiting lines."

The reason small business owners continue to line up despite government measures is that the direct loans for small business owners starting from the 1st of next month at commercial banks and IBK Industrial Bank of Korea target credit ratings 1 to 3 and 1 to 6, respectively. Small business owners with lower credit scores end up visiting SEMAS. Kim Jun-mo (pseudonym), a self-employed person waiting for loan consultation at the SEMAS center that day, lamented, "Many self-employed people have experience with bank loan delinquencies or loans from secondary financial institutions, so their credit ratings are not high enough to receive direct loans from banks." Meanwhile, on the 27th, the government announced the introduction of an 'odd-even system' based on birth year for applying for 10 million won direct loans for small business owners and expanded loan supply channels to commercial banks and IBK Industrial Bank of Korea according to credit ratings.