Minister Park Young-sun Urges Expansion of Financial Support for COVID-19 Affected Companies and 'K-Unicorns'

Park Young-sun, Minister of SMEs and Startups. Photo by Asia Economy DB

[Asia Economy Reporter Moon Hyewon] Park Young-sun, Minister of SMEs and Startups, met on the 9th with the government, financial institutions, banks, securities firms, and asset management companies to request financial support related to COVID-19 and to discuss the ‘K-Unicorn Project.’

On the same day, the Ministry of SMEs and Startups held the 1st Financial Support Committee meeting at the Korea Federation of SMEs in Yeouido, Seoul, to review the support performance for companies affected by COVID-19 and discuss future support measures. Attendees included Minister Park, representatives from the Ministry of Trade, Industry and Energy, the Financial Services Commission, financial institutions, guarantee institutions, and investment organizations.

Policy financial institutions provided new loans and guarantees totaling 102,000 cases and 5.2 trillion KRW to small and medium-sized enterprises (SMEs) and small business owners affected by COVID-19 as of the 3rd of this month. Additionally, extensions of maturity and repayment deferrals amounted to 62,000 cases and 5.3 trillion KRW.

The five major commercial banks (KB Kookmin, NH Nonghyup, Shinhan, Woori, Hana Bank) supported approximately 64,000 cases of new loans totaling 5.6 trillion KRW, and about 14,000 cases of maturity extensions, principal repayment deferrals, and interest deferrals totaling 5.3 trillion KRW.

In particular, the secondary guarantee loan, which allows small business owners to receive unsecured loans from commercial banks at a low interest rate of 1.5%, received about 21,000 applications totaling 520 billion KRW over three days from the 1st, with 5,000 cases amounting to 130 billion KRW executed.

Commercial banks have also established dedicated counters for small business owners and deployed experienced personnel to help them conveniently consult with banks and receive loans quickly.

At this meeting, the ‘K-Unicorn Project’ was announced to help startup and venture companies overcome the COVID-19 crisis and grow into unicorn companies. The K-Unicorn Project is a measure focused on supplementing the previously lacking domestic venture ecosystem and establishing a system to foster more unicorn companies.

Government and financial sector officials attending the meeting agreed that domestic capital should play a greater role in large-scale scale-up investments and reached a consensus to join forces to help startups and venture companies grow into unicorn companies.

Minister Park emphasized, “If the government and the private sector work together, it will be a great force to overcome the national emergency situation caused by COVID-19,” and added, “Only by actively embracing changes and innovations such as the untact (non-face-to-face) economy, including unmanned distribution and mobile simple payments after COVID-19, can we enhance national competitiveness,” urging a proactive response.