<Title>Ministry of SMEs and Startups' Next Year Budget, Record High 19 Trillion Won... 2.2 Trillion Won for Loss Compensation</Title>

13% Increase Year-on-Year... Plenary Session Resolution
Minimum Loss Compensation Raised to 500,000 Won
Protecting Small Businesses... Fostering Ventures and Startups

On the 3rd, the National Assembly plenary session passed the next year's budget bill amounting to 607.6633 trillion won.

[Asia Economy Reporter Kim Bo-kyung] The Ministry of SMEs and Startups' budget for next year has been decided at a record high of 19 trillion KRW, an increase of 2.2 trillion KRW (about 13%) compared to this year.

On the 3rd, the Ministry announced that the 2022 budget of 19 trillion KRW was finalized after approval by the National Assembly plenary session. Compared to the originally submitted budget proposal, 1.648 trillion KRW was added and 631.9 billion KRW was cut, resulting in a net increase of 1.0161 trillion KRW.

Next year's budget focuses on three major investment directions: ▲ recovery and competitiveness enhancement of small business owners ▲ fostering global innovative ventures and startups ▲ nurturing regional SMEs and creating jobs.

First, the budget to compensate small business owners for losses caused by business suspension and restrictions was confirmed at 2.2 trillion KRW. The minimum compensation amount was raised from 100,000 KRW to 500,000 KRW, increasing the loss compensation budget by 400 billion KRW compared to the original plan.

Additionally, a policy fund budget of 1.1904 trillion KRW was added to supply low-interest funds. Specifically, 700 billion KRW for small business support (loans) and 490.4 billion KRW for regional credit guarantee support.

Support projects for 60,000 small business owners' online entry, such as live commerce, and subscription economy initiatives will be actively promoted with a budget of 90.5 billion KRW, and the budget for the Commercial Renaissance Project to revitalize deteriorated commercial districts was increased to 25.4 billion KRW.

A new proactive management improvement program (23.8 billion KRW) was established to diagnose problems and support management improvement funds for small business owners at risk of closure.

Also, a strong small business development project (2.9 billion KRW) was newly created to support the creation of differentiated products and services through collaboration and convergence with creators and startups possessing innovative capabilities, providing support up to 100 million KRW.

The discovery of baby unicorn companies to spread the second venture boom was greatly expanded to 100 companies (30 billion KRW), and the budget for supporting commercialization of startups in innovative fields was finalized at 136.1 billion KRW, an increase of 30 billion KRW from the previous year.

Through a mother fund investment of 520 billion KRW, a fund of over 1.2 trillion KRW will be raised, and a comprehensive venture investment management system will be established (3.8 billion KRW) to provide venture investment-related information and systematically manage fund operation information.

The SME R&D budget was significantly expanded to about 1.8 trillion KRW to promote technological innovation in new business areas such as carbon neutrality, BIG3, the Korean New Deal, and infectious diseases.

The global startup festival 'ComeUp 2021' was held on the 17th at Dongdaemun Design Plaza (DDP) in Seoul. Kwon Chil-seung, Minister of SMEs and Startups, is touring the booths. Photo by Moon Ho-nam munonam@

The Regulatory Free Zone project received a total of 128.6 billion KRW to support the newly designated 6th zone (Busan) last month, and 11.9 billion KRW was allocated for logistics-only vouchers to resolve logistics difficulties for SMEs. Additionally, budgets of 500 million KRW and 1 billion KRW were assigned to the startup base Startup Park and Green Startup Town, respectively.

Furthermore, to enable SMEs to quickly respond to rapidly changing business environments such as post-COVID and digital transformation, the budget for business transformation consulting support projects was significantly expanded. Specifically, 11.5 billion KRW was allocated for business transformation diagnosis and consulting under the re-leap promotion project, and 420 billion KRW for re-leap support funds (loans). The Ministry also plans to promote the accounts receivable factoring project (138.2 billion KRW) to facilitate early cash conversion of accounts receivable.

Minister Kwon Chil-seung of the Ministry of SMEs and Startups said, "We plan to promptly and flawlessly execute the 2022 budget by quickly preparing project announcements and detailed implementation plans by the end of the year to help small business owners and self-employed overcome this difficult crisis."

He added, "We will also make every policy effort to spread the second venture boom through discovering and nurturing promising ventures and startups and actively supporting exports."