City·Gwangju Credit Guarantee Foundation·Banking Sector 'Special Guarantee Support Agreement'
Kang Ki-jung "Prioritizing Public Stability... Will Be a Strong Support"
Gwangju Metropolitan City will provide 100 billion KRW in operating funds in the first half of this year alone to alleviate financial difficulties faced by small business owners and self-employed individuals experiencing management crises.
Gwangju City announced on the 20th that it will issue an additional 40 billion KRW in the second half of the year, supporting a total of 140 billion KRW in business stabilization loans throughout the year, aiming to protect neighborhood commercial districts suffering from the economic crisis.
The special guarantee support project, which was originally 50 billion KRW in scale, was significantly expanded to 100 billion KRW last year and to 140 billion KRW this year (100 billion KRW in the first half, 40 billion KRW in the second half) in accordance with the economic policy direction of the 8th local government administration.
On this day, the city signed the ‘2023 Small Business (Neighborhood Commercial District) Special Guarantee Support Agreement’ together with seven financial institutions including Gwangju Credit Guarantee Foundation, Gwangju Bank, KB Kookmin Bank, NH Nonghyup Bank, Shinhan Bank, Woori Bank, and Hana Bank.
This special guarantee is part of the ‘2023 Gwangju Economy, Adding Strength+ Economic Policy’ and is intended to assist small-scale small business owners and self-employed individuals who are struggling due to high interest rates and high inflation.
According to the agreement, the parties agreed to mutually cooperate to ensure the smooth implementation of the 2023 Small Business (Neighborhood Commercial District) Special Guarantee Support Project through contributions and business expense support.
Previously, Gwangju City and six banks contributed 7.5 billion KRW in operating funds (4 billion KRW from the city, 3.5 billion KRW from six banks) to the Gwangju Credit Guarantee Foundation, and the city plans to provide loans totaling 100 billion KRW to local small business owners through commercial banks with full guarantees from the Gwangju Credit Guarantee Foundation.
In particular, to reduce the financial burden on small business owners, a total of approximately 4.8 billion KRW will be invested to support 3-4% interest on loan interest rates for one year from the loan execution date. An additional 1% support will be provided for those with medium to low credit scores.
The target recipients of this small business special guarantee loan support are all small enterprises, small business owners, and self-employed individuals located in Gwangju, excluding certain industries such as entertainment, gambling, and speculative businesses. Loan conditions allow borrowing without collateral through screening and guarantees by the Gwangju Credit Guarantee Foundation.
Small business owners with a credit score of 350 or higher can apply for loans at the banks that signed the agreement on this day, choosing between a 1-year grace period with 2-year installment repayment or a 1-year grace period with 4-year installment repayment, up to a maximum limit of 30 million KRW.
The loan interest rate is variable, based on short-term COFIX + 1.70~1.80% or CD rate (91 days) + 1.70~1.80%, and the guarantee fee is 0.7% per annum.
The operation period of this special guarantee starts from the implementation date of March 20 and continues until the limit is exhausted. Those wishing to apply for the special guarantee should make a consultation reservation through the Gwangju Credit Guarantee Foundation website and visit the respective branch on the reserved date.
Kang Ki-jung, Mayor of Gwangju, said, “To ensure that people’s livelihoods are not shaken and that households and businesses can survive the economic crisis marked by high inflation and high interest rates, Gwangju City will be a strong support pillar,” adding, “We will prioritize livelihood stabilization and prepare various support measures, including expanding the guarantee scale by 40 billion KRW in the second half of the year.”
Meanwhile, Gwangju City is supporting the full interest (3.5~4.5%) for one year for financially vulnerable groups in the financial blind spots who find it difficult to obtain institutional loans this year, including users of ‘Miso Finance’ (for startup, operation, facility improvement funds, etc.) through the Korea Inclusive Finance Agency’s Miso Finance Gwangju Buk-gu branch and users of the Credit Recovery Committee’s ‘Bitgoeul Loan.’
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