Daegu City Expands Support for SME Management Stabilization Funds by 1.2 Trillion Won Ahead of Lunar New Year

Daegu City will expand the 2024 Daegu City Small and Medium Enterprise (SME) Management Stabilization Fund to a scale of 1.2 trillion KRW to continuously respond to the funding demands of local SMEs (including mid-sized enterprises) and small business owners and to alleviate management difficulties.

The SME Management Stabilization Fund supports local SMEs (including mid-sized enterprises) and small business owners by enabling them to receive working capital loans at low interest rates from commercial banks. Depending on the loan amount and preferential status, a portion of the loan interest (1.3% to 2.2%) is subsidized for one year to reduce the financial burden on businesses.

Daegu City Dongin Government Building.

Last year, Daegu City allocated a budget of 17.9 billion KRW to subsidize the interest difference for the SME Management Stabilization Fund, covering 10,534 local companies and loans amounting to 998.4 billion KRW.

In 2024, due to the expected increase in demand for low-interest loans caused by the rising burden of high-interest rates, the loan scale will be expanded to 1.2 trillion KRW (from 1 trillion KRW in 2023) to ease the burden on local companies and increase the number of beneficiary companies.

In particular, the loan scale for small enterprises and small business owners experiencing financial difficulties due to the economic downturn will be expanded to promote management stability. Additionally, in preparation for the termination of the ‘Startup and Competitiveness Enhancement Fund’ project, special and preferential guarantee funds will be newly established and supported. The special interest subsidy rate will also be preferentially extended to more companies, including those certified for excellent industrial safety and health by Daegu City, which will receive an additional 0.4% preferential rate.

Applications for the 2024 Daegu City SME Management Stabilization Fund began on the 15th at branches of the Daegu Credit Guarantee Foundation, Korea Technology Finance Corporation, and Korea Credit Guarantee Fund, and loan recommendations will be accepted until funds are exhausted.

Especially ahead of the Lunar New Year holiday, Daegu City advanced the application start date for the holiday management stabilization fund to the 15th to help companies experiencing temporary financial difficulties and to alleviate the funding challenges of struggling SMEs and small business owners.

An Jung-gon, Director of the Economic Bureau, stated, “Daegu City will expand support for the 2024 SME Management Stabilization Fund to help small enterprises and small business owners overcome management crises amid difficult economic conditions. We will spare no effort to support SMEs and small business owners facing financial difficulties in this era of ‘three highs’?high interest rates, high prices, and high exchange rates.”