Following Timef, 'Allets' also extends maturity and repayment deferral for affected companies from the 4th

Government Decides to Expand Financial Support for Affected Companies at Economic Ministers' Meeting
Allets Unsettled Amount Estimated at 17 Billion Won... Liquidity Support Through Policy Financial Institutions
Ministry of SMEs and Startups Emergency Management Stabilization Fund, Some Remaining Amount... Applications Accepted from the 10th
Financial Sector Has Extended Maturities and Deferred Repayments of 169.9 Billion Won So Far
Support Interest Rates: Sopoong and Jungjingong 2.5%... Shinbo and Kieum Average 3.91%

Starting from the 4th, the government will provide liquidity support through policy financial institutions, including extensions of existing loan and guarantee maturities and repayment deferrals, targeting companies affected by delayed settlements from e-commerce company Allets, following similar measures for TMON, WEMAKEPRICE (Timep), Interpark Shopping, and AK Mall. Additionally, as the Small and Medium Business Corporation’s emergency management stabilization fund has some remaining balance after completing the review and support for applications, it will reopen applications and accept submissions starting from the 10th.

On the 2nd, the Financial Services Commission, Ministry of SMEs and Startups, and related ministries decided at the Economic Ministers’ Meeting to expand financial support to companies affected by delayed settlements from Allets. Following the Fair Trade Commission’s on-site investigation revealing that Allets’ unsettled amount is approximately 17 billion KRW, from the 4th, these affected companies are included in the financial sector’s maturity extension, repayment deferral, and policy financial institution liquidity support programs.

Companies that have suffered or are expected to suffer damages due to Allets’ delayed settlements can receive up to a one-year extension of maturity and repayment deferral on existing loans and guarantees. Eligible companies and loans include business or corporate loans held by companies with sales after July, the period subject to delayed settlements, across banks, life insurance, non-life insurance, credit finance companies, savings banks, mutual finance institutions such as NongHyup, Suhyup, Forestry Cooperatives, Credit Unions, and Saemaeul Geumgo.

As with the Timep support precedent, financial companies will broadly support companies listed on the e-commerce platform that prove sales after July through the seller page on the website. Companies can visit or consult with their financial institution’s branch for guidance.

Kwon Yu-yi, Director of Industrial Finance at the Financial Services Commission, explained, "To receive maturity extension and repayment deferral support, there must be no defaults such as principal and interest arrears or business closure. However, for companies that inevitably delayed loan repayments due to unexpected cash shortages caused by Allets’ unsettled payments, we plan to support those with arrears occurring on July 10 and October 4 as well." He added, "Other support conditions are the same as those for TMON, WEMAKEPRICE, Interpark Shopping, and AK Mall."

Expansion of Policy Financial Institution Liquidity Support Program... Up to 3 Billion KRW

From the 4th, Industrial Bank of Korea and Korea Credit Guarantee Fund, as well as the Small Enterprise and Market Service, will expand liquidity support targets to include Timep, Interpark Commerce, AK Mall, and Allets affected companies. The Small and Medium Business Corporation will start support from the 10th.

The Industrial Bank of Korea-Korea Credit Guarantee Fund program supports up to 3 billion KRW per company within the limit of unsettled amounts. Guarantee screening is simplified for amounts up to 300 million KRW per company to maximize supply, but for amounts between 300 million and 3 billion KRW, some restrictions may apply after limit review per company.

The Small Enterprise and Market Service program also supports up to 150 million KRW within the limit of unsettled amounts. It provides direct loans to supply as much as possible within the damage amount. Subsequently, the Small and Medium Business Corporation will provide funds starting from the 10th due to some remaining balance after the review and execution of the emergency management stabilization fund program prepared for this unsettled payment incident.

The Industrial Bank of Korea-Korea Credit Guarantee Fund program can be applied for at 99 Korea Credit Guarantee Fund branches nationwide, while the Small Enterprise and Market Service and Small and Medium Business Corporation programs can be applied for through the Small Business Policy Fund website and the SME Policy Fund website, respectively, with execution after review. The Ministry of the Interior and Safety has also requested local governments to cooperate so that their own programs can be expanded to include Allets affected companies.

Accordingly, local governments are improving support programs to meet demand, such as increasing company limits. Seoul City, starting from September, will raise the company limit from 50 million KRW to 150 million KRW through the "E-commerce Entry Damage Recovery Fund" program and lower the interest rate from 3.0% to 2.0% (with a guarantee fee of 0.5%).

Financial Sector Extends Loan Maturities and Defers Repayments Worth 169.9 Billion KRW for Timep Affected Companies

Since August 7, the entire financial sector has been providing maturity extensions and repayment deferrals on general loans and prepayment loans held by Timep affected companies. As of the 26th of last month, a total of 1,423 cases (169.9 billion KRW) have been granted up to one year of maturity extension or repayment deferral.

Policy financial institutions began accepting applications for liquidity support programs for affected companies from August 9 and started full execution from August 14. As of the 26th of last month, 1,266 cases (193 billion KRW) have been actually executed.

Additionally, policy funds from the Small Enterprise and Market Service and the Small and Medium Business Corporation apply a uniform interest rate of 2.5% for direct loans. The average loan amount was 284 million KRW for the Small and Medium Business Corporation and 36 million KRW for the Small Enterprise and Market Service. Analyzing the execution performance of the Industrial Bank of Korea-Korea Credit Guarantee Fund program, which uses market-based interest rates varying by user, the average loan amount was 331 million KRW, with a maximum loan amount of 3 billion KRW.

Furthermore, actively utilizing the Bank of Korea’s financial intermediation support loan funds resulted in provision at a low average interest rate of 3.91%, including cases with the lowest rate of 3.16%. Notably, 15% (33 cases) of loans applied the maximum interest rate of 4.4%, which is higher than 4.4%, indicating that low-credit companies benefited more.

Director Kwon explained, "Since companies with large damage amounts show high usage (application) rates for liquidity support programs, we plan to continue close management of high-damage companies with over 100 million KRW through the emergency response team."