"Looking to Exchange Support Funds for Cash"... Illegal 'Kkang' of National Support Funds on the Rise

SNS, Online Cafes See Surge in 'Support Fund Misuse'
'Local Business Support' Policy Undermined
"How Much Could It Be?", "Small Business Owners Suffer" Netizen Criticism Flood

On the morning of the 7th, a notice indicating the availability of the COVID-19 National Support Fund was posted at a store in a traditional market in Seoul. The photo is unrelated to specific expressions in the article. Photo by Yonhap News.

[Asia Economy Reporter Lim Ju-hyung] The so-called 'Kkang (illegal currency exchange)' using the currently distributed 'COVID-19 Coexistence National Support Fund' (National Support Fund) is rampant. Kkang refers to exchanging the support funds, which are provided in the form of local currency, for cash of lower value. Since local currency cannot be used outside a specific region and has limited places of use, the demand for such 'Kkang' seems to have increased.

On the 14th, searching for the keyword 'support fund' on social networking services (SNS) and secondhand trading sites easily reveals promotional posts for 'support fund Kkang,' which exchanges the National Support Fund for cash. The method involves temporarily lending a check card loaded with the support fund to the seller. Sometimes, they use their own slang to avoid detection.

Many netizens exchanging support funds for cash were also found on internet cafes and other platforms. The currency exchange is conducted by paying a specific amount at a local mart using the support fund, handing over goods, and receiving cash about 10-20% lower than the payment amount in return. Posts such as "Looking for someone to give 7,000 KRW cash per 10,000 KRW support fund" or "If you let me spend 80,000 KRW at the mart, I'll give you 60,000 KRW in cash" were also posted for bargaining.

Earlier, the government began distributing the National Support Fund on the 6th. The National Support Fund is a financial support policy that provides 250,000 KRW per person based on households in the bottom 88% income bracket.

Some posts from netizens attempting to trade the National Support Fund for cash appeared on certain online cafes and social networking services (SNS). / Photo by Internet homepage capture

The support fund is provided in various forms, such as being credited to a card in the recipient's name, receiving a prepaid card issued by local governments, or local love gift certificates. When credited to a card the recipient owns, it is distinguished from existing card company points, and the amount used is automatically deducted from the card bill.

The National Support Fund distributed by the government has more restrictions than cash, which can be used anytime and anywhere. First, if not fully used by December 31, it will automatically expire and be reclaimed by the government. The places where it can be used are also limited to specific regions where the recipient resides, and the stores where payment is possible are limited to traditional markets, neighborhood stores, supermarkets, restaurants, hair salons, pharmacies, hospitals, and franchise affiliates.

Since the amount is provided to support local businesses and small merchants affected by the prolonged COVID-19 pandemic, it aims to prevent the National Support Fund from being consumed in areas unrelated to the local economy.

Nevertheless, some netizens have been found circumventing these restrictions by exchanging the support fund for cash of lower value.

Residents are filling out application forms and receiving consultations for the National Support Fund at a community center in Seoul. / Photo by Yonhap News

Citizens expressed outrage toward some netizens engaging in 'support fund Kkang' activities.

A 20-something office worker, Mr. A, said, "Some people are ruining the purpose of helping small business owners and local markets struggling due to COVID-19 just for a few tens of thousands of won. I wonder if it has to come to this. It's really frustrating."

Another office worker, Mr. B (31), criticized, "Why do they even try to cash it out for such a small amount? Because of people like that, small business owners are suffering."

The government previously warned that if such acts are detected, the entire support fund could be reclaimed. The Ministry of the Interior and Safety announced the 'Emergency Disaster Support Fund Illegal Distribution Eradication Measures' in May last year.

According to the disclosed measures, illegal distribution of support funds includes △ recipients not using the support fund for consumption but reselling it to secure cash △ merchants refusing payment with the support fund or demanding additional charges, thereby unfairly treating consumers.

According to the Ministry of the Interior and Safety, if caught cashing out by reselling the support fund, the entire or part of the support fund may be reclaimed under the 'Act on the Management of Subsidies.'