Ministry of SMEs and Startups, Loans of 35.9 Billion KRW to 3,586 Low-Credit Small Business Owners

1.5% Fixed Interest Rate Applied, Interest Repayment Deferred for First 6 Months
8,993 Applicants, Up to 10 Million KRW Loans Granted to 3,586 People

Due to the rapid increase in COVID-19 cases, social distancing measures in the Seoul metropolitan area are being extended. On the 4th, the Myeongdong area in Jung-gu, Seoul, remained quiet even on the holiday. Photo by Jinhyung Kang aymsdream@

[Asia Economy Reporter Kim Heeyoon] The Ministry of SMEs and Startups announced on the 16th that, as a result of compiling the performance of the 'Low Credit Small Business Loan' which started on the 5th, 8,993 people applied within 10 days, and 359 million KRW was loaned to 3,586 people who passed the screening.

The Low Credit Small Business Loan is a system that provides loans of up to 10 million KRW to low-credit (credit score 744, former grade 6 or below) small business owners among those in business suspension, operation restriction, or management crisis industries. The loan is conducted directly by the Small Enterprise and Market Service, and the loan period is 5 years (2 years grace period, 3 years repayment). The interest rate is 1.5%, with interest payments deferred for 6 months, so there is no interest burden until the end of this year. However, those with tax arrears, overdue payments to financial institutions, those who are temporarily closed or out of business, or those who are not small business owners are excluded from support.

Among the small business owners who received loans, 1,805 people (50.3%) were in credit grade 7, followed by grade 6 (34.9%), grade 8 (13.2%), grade 9 (1.4%), and grade 10 (0.3%). By type, businesses under operation restrictions accounted for 71.2%, businesses under business suspension 17.4%, and businesses in management crisis 11.4%.

By industry, accommodation and food service accounted for the largest portion at 61.5% (2,205 people). This was followed by education services at 11.9% (425 people), wholesale and retail at 8.7% (311 people), and arts, sports, and leisure-related services at 8.0% (287 people).

Lee Euncheong, head of the Small Business Policy Division at the Ministry of SMEs and Startups, said, “We will do our best to facilitate small business owners, including accepting online applications 24 hours a day even on holidays.”