Small business owners affected by COVID-19 are receiving consultation on financial loan support at the local Small Business Support Center.
[Asia Economy Reporter Kim Daeseop] The Ministry of SMEs and Startups announced on the 31st that the daily number of applications for the pilot operation of the 'Small Business Owners 10 Million Won Emergency Loan' related to the novel coronavirus infection (COVID-19) has exceeded 1,400 cases.
The Small Business Owners 10 Million Won Emergency Loan has been in pilot operation since the 25th and will be officially implemented from the 1st of next month. The number of applications for this emergency loan has been increasing daily, from 234 on the first day to 713 on the 26th, 1,164 on the 27th, and 1,418 on the 30th.
The Ministry of SMEs and Startups expects that once the 10 Million Won Emergency Loan system is fully on track, it will be able to provide funds to more than 2,000 small business owners per day.
To respond to the rapidly increasing demand for funds from small business owners in the field, the government has divided roles by encouraging high-credit borrowers (grades 1 to 3) who can use commercial banks to apply through those banks, while small business owners with credit grades 4 and below, who have less access to commercial banks, will be supported by the Small Enterprise and Market Service.
The Small Business Owners 10 Million Won Emergency Loan provides a one-stop service from application to loan at the Small Enterprise and Market Service without going through 'banks-guarantee institutions,' based solely on credit for micro small business owners. The loan period is 5 years (2 years grace period, 3 years repayment), and the loan interest rate is set at 1.5%.
The Ministry of SMEs and Startups will address issues identified during the one-week pilot operation of the Small Business Owners 10 Million Won Emergency Loan. From the 1st of next month, an odd-even day system for loan applications will be implemented to alleviate congestion and bottlenecks at service counters. Applicants can apply on even-numbered days if their representative's birth year ends in an even number, and on odd-numbered days if it ends in an odd number.
The Ministry is currently installing the 'Smart Waiting System' at 37 Small Business Centers and plans to sequentially install it at all 62 centers nationwide. With the Smart Waiting System, visitors can enter their contact information on a tablet to register for loan consultation and spend their time freely; when their turn comes, they will receive a consultation time notification via KakaoTalk.
Additionally, to prevent small business owners from having to visit centers multiple times due to incomplete documents, the installation of unmanned civil document issuance machines will be expanded so that necessary documents can be issued on-site immediately. The required submission documents, which have been a chronic complaint, will be greatly simplified. Only three types of documents?business registration certificate, lease contract, and bankbook copy?will be required, eliminating the hassle of document preparation for small business owners.
The Ministry of SMEs and Startups plans to inform small business organizations of these improvements and promote them through card news, leaflets, and small business broadcasts to prevent cases of small business owners having to revisit.
A Ministry official said, "Since the Small Business Owners 10 Million Won Emergency Loan is a different approach from what has been done so far, we expect some trial and error in the field for a while," adding, "Once the system is well established, it will be a great support for small business owners with low credit who have difficulty obtaining loans to overcome COVID-19."
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