Korea Credit Guarantee Fund, 'Self-Employed and Small Business Low-Interest Refinancing Guarantee' Now Open for Continuous Application

[Asia Economy Reporter Eunju Lee] The Korea Credit Guarantee Fund announced that it has ended the 5-day application system for the ‘Low-Interest Refinancing Guarantee’ aimed at reducing the high-interest burden on self-employed individuals and small business owners, and that from the 31st of this month, applications will be accepted on a regular basis.

The ‘Low-Interest Refinancing Guarantee’ was implemented on September 30. Until now, to minimize inconvenience during the application process, the Korea Credit Guarantee Fund operated a 5-day application system for one month based on the last digit of the business registration number of self-employed individuals and small business owners. With the termination of the 5-day application system, from the 31st, self-employed individuals and small business owners wishing to apply for the Low-Interest Refinancing Guarantee can do so anytime through banks’ mobile apps or branch counters.

The ‘Low-Interest Refinancing Guarantee’ is a program that converts high-interest business loans with rates of 7% or higher, taken out by self-employed individuals and small business owners affected by COVID-19, into low-interest loans with an annual interest rate of 6.5% or less (maximum interest rate 5.5%, fixed guarantee fee 1%). Individual business owners can refinance up to 50 million KRW, and small corporate businesses can refinance up to 100 million KRW. As of October 27, the support scale for the Low-Interest Refinancing Guarantee totaled 2,605 cases and 95.3 billion KRW.

With the termination of the 5-day application system for the ‘Low-Interest Refinancing Guarantee,’ accessibility to the program for self-employed individuals and small business owners is expected to improve significantly. The Korea Credit Guarantee Fund plans to implement comprehensive promotional measures together with 14 participating financial institutions to enhance public understanding and activate the program.

A representative from the Korea Credit Guarantee Fund stated, “Due to recent continuous interest rate hikes and inflation, many self-employed individuals and small business owners are facing increased difficulties. We will actively promote various publicity activities to ensure that no one misses the opportunity to apply due to lack of awareness about the program.”