Pohang City Establishes Korea's Largest Special Guarantee Fund for Small Businesses Worth 91.4 Billion Won

Nation's First Public-Private Cooperation Matching Project ... 91.4 Billion Won Special Guarantee Fund Secured Until June

Mayor Lee Kangduk: "Aiming to Raise 150 Billion Won Next Year, Expanding Financial Institution Participation"

Pohang City has established a fund of 91.4 billion KRW, the largest in the nation, for the 'Hope Together Special Guarantee' to support financial aid for small business owners.

In February, a special guarantee business agreement for 30 billion KRW to support small business owners in Pohang was signed at the Daegu Bank headquarters between Pohang City, Daegu Bank, and the Gyeongbuk Credit Guarantee Foundation. (From left: Hwang Byungwoo, President of Daegu Bank; Lee Kangdeok, Mayor of Pohang; Kim Sehwan, Chairman of the Gyeongbuk Credit Guarantee Foundation)

This year, in order to significantly expand support for small business owners, the city is piloting a public-private partnership project that, for the first time in the country, matches city funds with financial institutions' contributions.

The special guarantee program operates by matching the financial institution's contribution with an equal amount from the city. The Gyeongbuk Credit Guarantee Foundation provides guarantees up to ten times the total contributions, enabling the participating financial institutions to offer loan products.

In February, the city signed an agreement for the 'Hope Together Special Guarantee' with Daegu Bank and the Gyeongbuk Credit Guarantee Foundation, with Pohang City and Daegu Bank each contributing 1.5 billion KRW to create a guarantee fund of 30 billion KRW.

Subsequently, in April, Pohang Suhyup and Ocheon Credit Union contributed 50 million KRW and 20 million KRW respectively, adding 1.4 billion KRW to the fund. In June, an additional 3 billion KRW was secured from Daegu Bank, bringing the total to 60 billion KRW and establishing Pohang City's special guarantee fund at a nationwide record of 91.4 billion KRW.

Additionally, in May this year, Pohang City revised its ordinance on support for small business owners, increasing the maximum limit for the special guarantee from 20 million KRW to 50 million KRW for general small business owners, thereby greatly expanding the scale of support.

Furthermore, in connection with childbirth encouragement policies, small business owners from multi-child families (two or more children) are eligible for support up to 100 million KRW. For young entrepreneurs with weak business foundations, the eligibility period was extended from within six months to within three years of starting a business, and the support limit was also increased to 100 million KRW.

Small business owners who receive loans through the special guarantee will have 3% of their loan interest subsidized for two years.

Applicants can submit the required documents, such as ID and business registration certificate, to the Gyeongbuk Credit Guarantee Foundation. After a guarantee review, the loan limit will be determined, and once the guarantee certificate is issued, the applicant can apply for a loan at the bank.

The special guarantee support will be available until the allocated budget is exhausted. For more details, please contact the Eastern Center of the Gyeongbuk Credit Guarantee Foundation.

Mayor Lee Kangdeok stated, "The Hope Together Special Guarantee Project in Pohang City is a program in which the local government and financial institutions cooperate to support small business owners, who are the backbone of the local economy. Next year, we aim to establish a guarantee fund of 150 billion KRW by encouraging more financial institutions to participate, so that we can give hope to small business owners struggling with funding."