900 Billion KRW Increase Compared to This Year
Low-Interest Loans and Special Credit-Guaranteed Financing Implemented
Operating Funds Loan Up to 5 Years, Facility Funds Loan Up to 13 Years
The government has allocated 636.5 billion KRW for loan support from the Tourism Promotion Development Fund next year. Among this, the '2024 First Half Tourism Fund Loan Support Plan' to execute 350 billion KRW was announced on the 27th.
The Ministry of Culture, Sports and Tourism announced the loan support plan for the Tourism Promotion Development Fund for next year on the same day. The total amount has increased by 90 billion KRW compared to last year, with 350 billion KRW to be disbursed first in the first half of the year.
The tourism fund loan has been a representative financial support project in the tourism sector since 1973. It provides loans to tourism businesses at interest rates lower than market rates, contributing to business stability and the expansion of tourism industry infrastructure.
According to the Ministry, next year will see support totaling 636.5 billion KRW, including 536.5 billion KRW in fund loans and 100 billion KRW in interest subsidies. Considering the rapid increase in investment demand as the tourism industry recovers from the COVID-19 slump, the amount has been increased by 90 billion KRW compared to this year.
First, 350 billion KRW (300 billion KRW in fund loans and 50 billion KRW in interest subsidies) will be allocated in the first half of the year and promptly disbursed to businesses in need of funds.
The loan interest rate for the tourism fund is based on the variable interest rate of the Ministry of Economy and Finance’s Public Fund Management Fund Loan Account, with a base rate of 3.73% for the fourth quarter of 2023. Small and medium enterprises, public corporations, and individuals receive a preferential rate reduction of 0.75 percentage points on operating funds, while facility funds for mid- to low-priced accommodations receive a 1.25 percentage point reduction, among other various interest rate benefits, offering much more favorable conditions than general loans from commercial banks. The loan period is up to 5 years for operating funds and up to 13 years for facility funds.
The Ministry will continue the interest subsidy project for the tourism fund, which was piloted this year. This project subsidizes part of the interest rate (2.5?3%) on loans from commercial banks to tourism businesses. It will be implemented separately from the fund loans with a scale of 100 billion KRW. The participating banks will expand from the existing three banks?Kookmin, Industrial, and NongHyup?to 12 commercial banks.
For small and medium tourism businesses with weak collateral, a special loan with credit guarantees will be implemented in 2024 on a scale of 100 billion KRW in connection with the tourism fund loans. This loan provides benefits such as low interest rates and extended repayment periods by issuing credit guarantee certificates from public guarantee institutions (Credit Guarantee Foundations).
The application limit is 200 million KRW, and small funds within 20 million KRW are exempt from limit screening. Starting next year, businesses that have received the 'Daily Recovery Special Loan' from the Small Enterprise and Market Service can also apply, strengthening financial support for small tourism operators.
Tourism businesses wishing to receive the special loan can apply for credit guarantees at regional Credit Guarantee Foundation branches (144 nationwide), obtain a credit guarantee certificate, and then receive loans at NongHyup Bank branches (1,138 nationwide).
Detailed information about the tourism fund loans is provided in the Ministry of Culture, Sports and Tourism website’s '2024 First Half Tourism Fund Loan Support Guidelines.' Further details related to tourism fund loans can be confirmed through the Loan Continuous Support Center’s telephone consultation service and website.
© The Asia Business Daily(www.asiae.co.kr). All rights reserved.
