Eunpyeong-gu Provides 40.4 Billion Won Financial Support for Small Businesses to Overcome COVID-19 Crisis

On the 6th, Eunpyeong-gu, Seoul Credit Guarantee Foundation, and Shinhan, Woori, Hana Banks Sign Special Financial Support Agreement...Up to 20 Million KRW Special Guarantee and 1-Year Interest-Free Loan Support for Small Business Owners per Company

[Asia Economy Reporter Park Jong-il] Eunpyeong-gu (Mayor Kim Mi-kyung) signed a business agreement on the 6th at the Eunpyeong-gu Office Planning Situation Room with the Seoul Credit Guarantee Foundation and commercial banks (Shinhan, Woori, Hana) to alleviate the financial difficulties of small businesses and small merchants in the area suffering from prolonged COVID-19 economic hardships, and will implement special credit guarantee support totaling 40.4 billion KRW starting from the 7th.

The business agreement ceremony was attended by Kim Mi-kyung, Mayor of Eunpyeong-gu, Han Jong-kwan, Chairman of the Seoul Credit Guarantee Foundation, Park Hyun-joo, Head of Shinhan Bank Western Headquarters, Oh Jae-il, Head of Woori Bank Western Sales Headquarters, and Kim Ki-seok, Executive Director of Hana Bank Central Sales Headquarters. The agreement simultaneously covered interest-free loan support for small merchants and a special guarantee agreement funded by Eunpyeong-gu.

Through this agreement, Eunpyeong-gu decided to contribute 2.1 billion KRW, Woori Bank 700 million KRW, Shinhan Bank 300 million KRW, and Hana Bank 200 million KRW, totaling 3.3 billion KRW to the Seoul Credit Guarantee Foundation. The foundation will use these funds to provide credit guarantees, implementing a total of 40.4 billion KRW in financial support for small merchants, combining a 20 billion KRW interest-free loan special guarantee and a 20.4 billion KRW special guarantee jointly funded by Eunpyeong-gu and commercial banks.

The interest-free loan support for small merchants, promoted as a livelihood economy measure through cooperation between Seoul City and its 25 autonomous districts, targets small businesses and small merchants located in Eunpyeong-gu with more than six months of business experience and a credit score of 595 points (equivalent to grade 7 or higher). Applications can be submitted at 13 branches of Shinhan Bank, Woori Bank, and Hana Bank located in Eunpyeong-gu, and the issuance of guarantee certificates by the Seoul Credit Guarantee Foundation can be processed in a one-stop manner.

The loan limit is up to 20 million KRW per company (including previously guaranteed amounts up to 100 million KRW), and the loan period is five years (one-year grace period followed by four years of equal installment repayments). For the first year, interest-free loans are possible through interest subsidies from Eunpyeong-gu, and thereafter, a variable interest rate with an additional rate within 1.7% will be applied.

The interest-free loan support for small merchants offers a preferential guarantee ratio of 100% and a guarantee fee rate of 0.5%. For other loan-related matters, please refer to the Eunpyeong-gu Office website.

For inquiries related to the announcement, contact the Eunpyeong-gu Job and Economy Division or the Seoul Credit Guarantee Foundation Eunpyeong Branch. For loan-related inquiries, contact the respective bank branches.

The COVID-19 special credit guarantee, which Eunpyeong-gu launched in October 2020 with a contribution of 500 million KRW and is currently operating at a scale of 7.5 billion KRW, is nearing its limit, but an additional 20.4 billion KRW has been secured to prepare operational funds for business growth after the end of the pandemic.

The loan limit is 50 million KRW per company (up to 200 million KRW including previously guaranteed amounts upon separate review), and the loan period is five years.

The loan interest rate is based on a three-month variable rate plus an additional rate within 1.7%, and as of May, business funds can be procured at a low interest rate of around 2% per annum.

Han Jong-kwan, Chairman of the Seoul Credit Guarantee Foundation, said, “It is very meaningful that not only the district office but also local banks are participating to resolve the financial difficulties of small businesses and small merchants in Eunpyeong-gu due to the resurgence of COVID-19,” adding, “We hope that this agreement will improve the business environment for small businesses and small merchants in Eunpyeong-gu and revitalize the local commercial district beyond pre-COVID levels.”

Kim Mi-kyung, Mayor of Eunpyeong-gu, stated, “I hope that this special financial support project, promoted through cooperation among the public, private, and government sectors, will serve as a catalyst for small businesses and small merchants in the area to overcome difficulties and rise again,” and added, “We will continue to listen to the difficulties of small businesses and small merchants, prepare various support measures, and do our best to stabilize the local economy.”