Special Credit Guarantee of 1 Trillion Won for Small Businesses and Small Merchants

Ministry of SMEs and Startups Signs Financial Support Agreement with Regional Credit Guarantee Foundations and 13 Major Banks

[Asia Economy Reporter Kim Cheol-hyun] The Ministry of SMEs and Startups (Minister Lee Young) announced that on the 1st, it held the 'Financial Support Agreement Ceremony for Small Enterprises and Small Merchants to Overcome Complex Crises' with the Korea Credit Guarantee Fund (Chairman Lee Sang-hoon), 13 commercial banks, and regional banks.

This agreement mainly involves cooperation between regional credit guarantee foundations and banks to actively provide financial support to small enterprises and small merchants with medium credit who face difficulties in financing. To alleviate financial costs and facilitate smooth funding for medium-credit small enterprises and small merchants, a special guarantee of 1 trillion KRW will be implemented, increasing the guarantee ratio up to 95% (from 85%) with a maximum limit of 30 million KRW per business, offering preferential guarantee fees (0.5%) and interest rate benefits.

The support targets are small enterprises and small merchants with medium credit (personal credit score between 710 and 839) who have been operating for more than six months. Through this special guarantee implementation, it is expected that financial accessibility for medium-credit small enterprises and small merchants, who have been relatively marginalized in the formal financial sector, will improve, enabling smooth capital supply.

Cho Joo-hyun, Vice Minister of the Ministry of SMEs and Startups, attended the agreement ceremony and said, "We will thoroughly monitor to ensure that the special guarantee is properly executed on the ground, observe the economic situation, and continuously prepare support measures to reduce the financial burden on small enterprises and small merchants."