Gangdong-gu Lowers Interest Rate on Small Business Development Fund Loans to 0%

District and Small Business Development Fund Loan Scale Increased by 1 Billion KRW to 4 Billion KRW Annually... Interest-Free Loans Supported Until December

[Asia Economy Reporter Jong-il Park] Gangdong-gu (Mayor Lee Jeong-hoon) will expand the scale of loans from the Small and Medium Enterprise Development Fund and reduce the loan interest rate to 0% starting from the 1st, to support small and medium-sized enterprises (SMEs) and small business owners facing economic difficulties due to the prolonged COVID-19 pandemic.

Gangdong-gu plans to flexibly respond to the increasing demand for funds by contributing an additional budget of 1 billion KRW, expanding the loan scale of the Small and Medium Enterprise Development Fund from the existing 3 billion KRW to 4 billion KRW.

In addition, the interest rate on loans from the Small and Medium Enterprise Development Fund, previously 1.8% per annum, will be reduced to 0%, implementing a practical interest reduction measure for SMEs.

This interest rate reduction will be temporarily applied from June to December and will also apply to companies currently repaying loans taken from the existing Small and Medium Enterprise Development Fund.

Loans from the Small and Medium Enterprise Development Fund are available to businesses located in Gangdong-gu that have been registered for more than three months and have repayment ability (secured by real estate or credit guarantee) according to bank credit regulations. However, companies that have previously received this fund but have not completed repayment, or those in restricted industries such as real estate or other luxury and entertainment sectors, are not eligible to apply.

The loan limit per company is up to 200 million KRW, with repayment conditions of a one-year grace period followed by three years of equal installment repayments.

Applicants can check the required documents for loan application on the Gangdong-gu Office website under Notices and Announcements, and then visit the Gangdong-gu Labor Rights Center (658 Olympic-ro, 6th floor) to submit their application in person.

Mayor Lee Jeong-hoon of Gangdong-gu said, “Through this expansion of the Small and Medium Enterprise Development Fund support, we hope to provide practical help such as easing financing and interest burdens for small business owners facing difficulties. We will continue to do our best to support SMEs and small business owners in Gangdong-gu to regain management stability.”

Gangdong-gu is also operating a special credit guarantee recommendation support system that provides up to 50 million KRW per company at a low guarantee fee rate for small business owners with good business performance and credit status but insufficient collateral.