Recent 100 Billion KRW Loan Program Established
Support Also Provided for Loans, Advertising Costs, and Insurance Fees
A self-employed restaurant owner supported through Woowa Brothers' 'First My Store Preparation Loan' program. (Photo by Woowa Brothers)
Baedal Minjok, the number one domestic delivery platform, has stepped up support for small restaurant business owners. Under the slogan "The platform grows when restaurant owners succeed," it has carried out cash support projects worth 150 billion KRW for them over the past three years.
Woowa Brothers, the operator of Baemin, recently created a new loan program targeting small business owners. This loan program, worth a total of 100 billion KRW, provides collateral and preferential benefits to restaurant owners and traditional market merchants who have difficulty obtaining loans due to lack of credit. To support this project, Woowa Brothers contributed 3.5 billion KRW last month to the Korea Credit Guarantee Fund, becoming the first private company to do so. A Woowa Brothers official said, "This loan program is expected to serve as a timely relief for small business owners who urgently need funds due to loan maturities after borrowing during the COVID-19 outbreak, interest rate hikes, and rising raw material prices."
Baemin has supported small restaurant business owners with various loans, advertising fees, and insurance premiums. The restaurant industry is sensitive to trends and faces difficulties in raising funds, resulting in relatively high instability in profits and cash flow. This makes it difficult to secure financing based on credit or collateral. The COVID-19 pandemic was an event that exposed these vulnerabilities to the extreme. In 2020, during the severe spread of COVID-19 in March, April, August, and December, Baemin refunded 50% of advertising fees to reduce the burden on Baemin-registered merchants. The refund amount was approximately 62 billion KRW. In 2021, Baemin provided support worth about 78.8 billion KRW to small restaurant business owners facing customer decline and sales drops.
In 2021, Baemin, together with KB Kookmin Bank, created the "First Store Purchase Loan" program to support store purchase funds for owners who have difficulty using first-tier financial institutions due to low credit ratings and lack of personal collateral. Baemin raised 5 billion KRW for operating the loan product, and KB Kookmin Bank provided a loan product with a total limit of 50 billion KRW applying preferential interest rates to self-employed restaurant owners. For owners lacking personal collateral, Baemin provided collateral.
The "Woowa Boss Care Fund," which supports medical and living expenses for restaurant owners and scholarships for their children, is also a representative support program for restaurant owners by Baemin. It was established by Woowa Brothers founder Kim Bong-jin with a donation pledge of 20 billion KRW. The fund operates with 10 billion KRW for medical expense support for restaurant owners and 10 billion KRW for a scholarship program for their children. A Woowa Brothers official explained, "Medical and living expense support is one of the essential support measures because sudden illness or accidents can threaten the livelihood when running a restaurant," adding, "Last year, 668 restaurant owners received medical and living expense support worth 2 billion KRW through this program." Regarding scholarships, so far, 309 children of restaurant owners have received 2 billion KRW in scholarships and mentoring programs.
Since 2021, Baemin has also participated in the small business O2O (online-to-offline) expansion support project conducted by the Small Enterprise and Market Service. It provides restaurant owners with cash-equivalent points (Biz Points) worth 500,000 KRW each, which can be used for advertising fees and purchasing delivery supplies on Baemin. Last year, Baemin added 350 million KRW of its own funds, and by the end of last year, over 16,000 merchants received support totaling 4.75 billion KRW.
Baemin is also supporting subscription to flood and windstorm insurance, a policy insurance designed to protect small restaurant business owners from natural disasters. This program fully covers the 30% self-pay portion of the insurance premium (about 27,000 KRW) on behalf of the owners. Starting in March last year in Busan, the program expanded nationwide in September. So far, about 30,000 owners have received approximately 830 million KRW in self-pay support. There have been 110 reported cases of flood and windstorm damage, with compensation amounting to about 430 million KRW.
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