Lee Cheol-woo, Governor of Gyeongbuk, "No Company Should Collapse Due to Interest Payments" ... Announces Support Measures Worth 3 Trillion Won

On the 15th, Gyeongbuk Province took swift action to ease the high-interest burden on local small and medium-sized enterprises (SMEs) and small business owners by implementing financial support measures such as lowering interest rates on provincial support policy fund guarantee products and securing funds for low-interest loans for SMEs.

On February 20th, Gyeongbuk Province held the first-ever financial support policy meeting at the metropolitan provincial level, involving related organizations and financial institutions to address the high-interest rates faced by SMEs and small business owners. As a follow-up, the province reviewed the feasibility of various interest rate reduction measures through active cooperation with financial institutions and decided to implement immediately actionable measures first.

Gyeongbuk Provincial Government Office.

First, six commercial banks agreed to participate in lowering the interest rates on guarantee products (Gyeongbuk Betim Finance) operated by the Gyeongbuk Credit Guarantee Foundation, a provincial investment and contribution institution. For 100% full guarantees, the rate will be reduced by 0.2% to CD (90 days) + 2.0%, for partial guarantees to CD (90 days) + 2.3%, and for refinancing guarantees to CD (90 days) + 2.0% compared to the existing rates.

Additionally, five commercial banks promised to participate in signing agreements to reduce the interest rates applied to most city and county small business special guarantee projects, which previously ranged from 4% to 9% without agreements, to a level of CD (90 days) + 2.0~2.3%.

In particular, to secure funds for low-interest financial support for small enterprises and small business owners, financial institutions contributed a special fund of 15.6 billion KRW to the Gyeongbuk Credit Guarantee Foundation, enabling the operation of loan funds amounting to 234 billion KRW, which is 15 times the contributed amount.

This not only represents an increase of 6.5 billion KRW compared to last year's 9.1 billion KRW but also marks the largest special contribution ever, achieved through the decisive cooperation of financial institutions to overcome the high-interest rate situation.

Instead of lending Gyeongbuk Province funds to commercial banks interest-free, the banks prepare loan funds twice the amount of the provincial funds and support SMEs with low-interest loans through basic and additional interest rate reductions under the ‘Gyeongsangbuk-do SME Happiness Fund Project,’ which will be expanded.

In the first supplementary budget this year, 50 billion KRW was secured, increasing the budget from 30 billion KRW to 80 billion KRW, expanding the total loan scale to 160 billion KRW. With interest rate reductions applied through agreements with banks, loans will be provided at interest rates less than 50% of the initially calculated rates for borrowing companies.

Furthermore, including Gyeongbuk Province’s direct low-interest loan projects such as 90 billion KRW for SME startups and competitiveness enhancement, 10 billion KRW for venture business promotion funds, 400 billion KRW for SME working capital and disaster funds interest subsidies, 200 billion KRW for small business Gyeongbuk Betim Finance, 100 billion KRW for Gyeongbuk innovative SME future connection financial support, 848 billion KRW for city and county SME working capital, 75 billion KRW for city and county small business special guarantees, and 1.2 trillion KRW for small business support (general) by the Gyeongbuk Credit Guarantee Foundation, the annual support scale for SMEs and small business owners in the province exceeds 3 trillion KRW.

Governor Lee Cheol-woo stated, “At the very least, in our Gyeongbuk, no diligent and well-performing company should collapse due to interest burdens. If interest is burdensome, banks should reduce the interest beyond a certain level, and the government should bear that burden. We will actively propose to the central government the current status and institutional improvements related to the interest burden on SMEs.”