Mid-sized Enterprise Agency's 'Timef Loan' Runs Out in One Day... 70 Billion Won Additional Injection (Comprehensive)

Minister Oh Young-joo Holds Meeting with 'Time4' Unsettled Companies
Jungjin Gong and Sojin Gong Execute Loans During Transition of Emergency Management Stabilization Funds
Jungjin Gong Loans with Large Limits Inject Total of 100 Billion Won

The Ministry of SMEs and Startups will inject an additional 70 billion KRW in emergency management stabilization funds for companies affected by TMON and WEMAKEPRICE (TMEP), managed by the Small and Medium Business Corporation (SBC). It has also launched a survey on the status of online platform companies to secure new sales channels for the affected companies.

On the afternoon of the 14th, the Ministry of SMEs and Startups held a meeting at Dream Square in Mapo, Seoul, targeting companies that suffered damages due to delayed settlements from TMON and WEMAKEPRICE. This meeting was organized to listen to the difficulties faced by companies related to unsettled payments and to provide guidance on the government’s support plans.

Minister Oh Young-joo of the Ministry of SMEs and Startups is speaking at the 'Timon and Wemakeprice Unsettled Payment Victim Companies Meeting' held on the 14th at Dream Square in Mapo-gu, Seoul. [Image source=Yonhap News]

Minister Oh Young-joo of the Ministry of SMEs and Startups announced that an additional 70 billion KRW of emergency management stabilization funds from SBC will be injected. Initially, the Ministry had allocated a budget of 30 billion KRW from SBC funds. The SBC funds were fully allocated within a day of opening on the 9th, with applications exceeding more than four times the allocated budget. This was due to the slightly lower interest rates compared to other loan products or agreement programs and the loan limit of up to 1 billion KRW, which attracted high demand from small and medium enterprises.

Minister Oh said, "Many companies applied for the emergency management stabilization funds, and we reviewed the need to expand the budget over the past weekend," adding, "After consultation with the financial authorities, we secured and will inject 70 billion KRW. Adding this to the 170 billion KRW from the Small Enterprise and Market Service (SEMAS) and the existing 30 billion KRW from SBC, a total of 270 billion KRW has been allocated."

Earlier, the Ministry of SMEs and Startups immediately participated in a task force with related ministries to discuss support measures as the seriousness of the unsettled payments issue with TMON and WEMAKEPRICE was raised. On July 27 and August 7, the government included emergency management stabilization fund support plans in its measures to assist companies struggling with liquidity.

Minister Oh stated, "The Financial Services Commission has separately prepared 300 billion KRW in funds through the Korea Credit Guarantee Fund and Industrial Bank of Korea," and added, "If the funds prepared by the Ministry of SMEs and Startups are insufficient, we will connect companies to receive support from Industrial Bank of Korea and others."

At the meeting, voices expressing dissatisfaction with the emergency management stabilization fund support were heard. The CEO of affected company A said, "What is needed is support with lower interest rates rather than just more loans; there is not much difference from general loans."

The CEO of company B said, "I don’t understand why documents like building registration certificates or self-registration certificates are required to get a loan. It would be better to boldly remove unnecessary documents," and added, "Many companies affected by the TMEP incident have become delinquent, and due to delinquency, some cannot receive loan support. I hope proper support will be provided."

The CEO of company C expressed concern, saying, "With TMON and WEMAKEPRICE disappearing, the remaining major platforms will be Naver and Coupang, which may lead to a monopoly," and suggested, "Although it may be an idealistic idea, developing public platforms and public logistics systems is worth considering."

Another issue pointed out was the inaccuracy in the aggregation of unsettled damage amounts. The CEO of company B said, "There was a 70 million KRW difference between the unsettled amount calculated by the Financial Supervisory Service and our own calculation," emphasizing, "It is problematic to base loan amounts solely on this data. The calculation errors must be corrected quickly."

In response, Minister Oh said, "The most important thing when supporting emergency management stabilization funds through SEMAS and SBC was to act as quickly as possible. We will improve the shortcomings through internal discussions."

He continued, "We will check how many people are unable to receive support due to delinquency and why," and explained, "We consider it important to create a safer online environment and are discussing what laws are necessary to prevent problematic e-commerce companies from operating in the market."

The Ministry of SMEs and Startups will work to secure sales channels for companies affected by TMEP.

Lee Dae-geon, Director of Small Business Policy at the Ministry, said at the meeting, "We have started a survey on platform companies," adding, "We will comprehensively review settlement cycles, escrow, and other factors to select platform companies that are convenient and safe for small business owners." He further stated, "We will work with the selected companies to improve difficult financial situations through methods that help affected companies, such as commission support or coupon issuance."

Minister Oh said, "We will create a safer and healthier e-commerce environment," and added, "We will seek ways to provide even short-term sales support."