Yangcheon-gu Further Lowers Interest Rate on Small Business Development Fund Loans to 0.8%

Loan Interest Rate Reduced from 1.5% to 0.8% per Annum, Bank Minimum Operating Cost Ratio (0.8%) Applied... Temporarily Effective from September 17 This Year to December 31 Next Year

[Asia Economy Reporter Jong-il Park] Yangcheon-gu (Mayor Kim Soo-young) announced that it will further lower the ‘Yangcheon-gu Small and Medium Enterprise Development Fund Loan Interest Rate’ to support local small and medium-sized enterprises (SMEs) facing financial difficulties amid the prolonged economic crisis caused by COVID-19.

Last March, the district had once adjusted the loan interest rate (from 2.0% to 1.5%) to assist small business owners struggling due to the COVID-19 situation. However, as the difficulties of small business owners have gradually intensified with the ongoing pandemic, the district decided to further reduce the loan interest rate this year as well by applying the bank’s minimum operating cost ratio (0.8%), following last year’s adjustment.

The eligible applicants include companies that applied for the Yangcheon-gu Small and Medium Enterprise Development Fund in the second half of 2021, as well as those who have already received loans from the fund.

The application period for the reduced interest rate benefit is temporary, from September 17, 2021, to December 31, 2022.

Eligible applicants are SMEs and small business owners operating businesses in Yangcheon-gu. For manufacturing businesses, loans are available up to KRW 300 million, and for wholesale, retail, and other industries, up to KRW 80 million. The repayment terms are a 2-year grace period followed by 3 years of equal installment repayments. Social enterprises, venture companies, and women-owned businesses are given preferential treatment, while luxury and entertainment industries are excluded from loans.

The district expects that this interest rate reduction will significantly reduce the loan interest burden on small business owners and provide strong support to the local commercial districts suffering from the COVID-19 downturn.

The Yangcheon-gu Small and Medium Enterprise Development Fund has been established and operated since 1993 to support the management stability and facility funds of SMEs and small business owners. This year, a total of KRW 5 billion will be provided. KRW 1.5 billion was disbursed in the first half of the year, and the remaining KRW 3.5 billion is planned to be disbursed in the second half. However, applications for the SME Development Fund loans for the second half of 2021 have already closed. Those wishing to apply can submit their applications in January 2022 to receive the interest rate reduction benefit.

For more details about the Small and Medium Enterprise Development Fund, please contact the Job and Economy Division of Yangcheon-gu Office.

Kim Soo-young, Mayor of Yangcheon-gu, said, “I hope this interest rate reduction measure for the Small and Medium Enterprise Development Fund will be a great help to many SMEs and small business owners struggling with management difficulties due to COVID-19.”