Yisang-il, Mayor of Yongin, Proposes "Expansion of SME Guarantee Limits" to the Presidential Office

"Guarantee Limit Set in 2009 Should Be Increased from 800 Million to 1.5 Billion"

Lee Sang-il, Mayor of Yongin City, Gyeonggi Province, proposed to the Presidential Office to raise the credit guarantee limit to alleviate funding difficulties for small and medium-sized enterprises (SMEs).

According to the city on the 17th, Mayor Lee called Park Chun-seop, Chief Economic Secretary of the Presidential Office, on the 15th and said, "The special guarantee limit supported by the regional credit guarantee foundation has been set at 800 million KRW since 2009 and has remained unchanged until now," adding, "Considering the growth scale of SMEs and inflation, the current limit is not practically reasonable."

Lee Sang-il, Mayor of Yongin. [Photo by Yongin City]

The special guarantee of the credit guarantee foundation is a system that supports SMEs lacking collateral to borrow funds from banks. Mayor Lee said, "Expanding the limit from 800 million KRW to 1.5 billion KRW would be a great help to companies experiencing funding difficulties."

The mayor's proposal to raise the guarantee limit comes after listening to the difficulties of local business owners suffering from funding shortages due to the prolonged high-interest rate trend and rising raw material prices, and aims to resolve these issues.

Mayor Lee also delivered related materials to Chief Secretary Park for improving the relevant system. According to the materials, the annual facility investment amount in manufacturing was only 5.9812 trillion KRW in 2009 but increased by 491% to 35.3691 trillion KRW in 2021. Meanwhile, the guarantee limit has remained unchanged, increasing the financial burden on companies, the materials pointed out.

Mayor Lee explained, "Even companies with sufficient growth potential and large sales volumes often fail to receive adequate funding support due to the guarantee limit set long ago," adding, "I requested the Presidential Office to review this because I believe that implementing bolder support policies for companies will improve the economic situation and create more jobs."

Yongin City plans to officially propose this policy suggestion to the Ministry of SMEs and Startups and request the Gyeonggi Credit Guarantee Foundation to revise related regulations to exclude credit guarantee amounts from other institutions when calculating the credit guarantee limit.