Government Provides Support Such as Loan Repayment Deferrals for Companies Affected by Allets Settlement Delays

Support for extension of existing loans and guarantees from the 4th
Allets victim companies can apply following Timf and Interpark Shopping

The government will provide financial support to companies affected by the settlement delay incident involving the e-commerce platform Allets.

On the 2nd, the Financial Services Commission, the Ministry of SMEs and Startups, and other related ministries decided at the Economic Ministers' Meeting to include companies affected by Allets' settlement delay in the support targets of existing loan and guarantee maturity extensions, repayment deferrals, and liquidity support programs of policy financial institutions.

According to the Fair Trade Commission's investigation, the amount of unsettled payments by Allets was identified as approximately 17 billion KRW. From the 4th, companies that have suffered or are expected to suffer damages due to Allets' settlement delay, as well as Wemakeprice, TMON, Interpark Shopping, and AK Mall, can receive up to a one-year maturity extension and repayment deferral on existing loans and guarantees.

The eligible companies and loans for support are business or corporate loans held by companies with sales after July, the period subject to the settlement delay, across all financial sectors. However, household loans such as mortgage loans or personal credit loans unrelated to the business are excluded.

As with previous support measures, financial institutions will provide support if companies listed on Allets prove sales after July through the seller page on the homepage.

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 have inevitably delayed loan repayments due to unexpected cash flow shortages caused by Allets' unsettled payments, this maturity extension and repayment deferral will also support arrears occurring between July 10 and October 4.

IBK Industrial Bank of Korea, Korea Credit Guarantee Fund, and Small Enterprise and Market Service will expand liquidity support to TMON, Wemakeprice, Interpark Commerce, AK Mall, and Allets-affected companies starting from the 4th, and the Korea SMEs and Startups Agency will do so from the 10th.

The IBK Industrial Bank of Korea and Korea Credit Guarantee Fund program will provide support up to a maximum of 3 billion KRW per company, with simplified guarantee screening for amounts up to 300 million KRW to supply as much as possible. For amounts between 300 million KRW and 3 billion KRW, some amount restrictions may apply after company-specific limit assessments.

The Small Enterprise and Market Service program will also provide support up to a maximum of 150 million KRW based on the unsettled amount. The Small Enterprise and Market Service will provide direct loans to supply as much as possible within the damage amount.

The Korea SMEs and Startups Agency will provide the remaining funds from the emergency management stabilization fund program, which was prepared due to the unsettled payment incident previously occurring at TMON and others, starting from the 10th.

The IBK Industrial Bank of Korea and Korea Credit Guarantee Fund program applications can be submitted through 99 Korea Credit Guarantee Fund branches nationwide. The Ministry of the Interior and Safety has also requested cooperation from local governments to expand their own programs to include Allets-affected companies.

Meanwhile, since August 7, all financial sectors have been providing maturity extensions and repayment deferrals for general loans and advance payment loans held by companies affected by TMON and Wemakeprice. Up to September 26, a total of 1,423 cases (169.9 billion KRW) of loans have been granted maturity extensions or repayment deferrals for up to one year.

Policy financial institutions have actually executed a total of 1,266 cases (193 billion KRW) by September 26. Policy funds such as the Small Enterprise and Market Service and Korea SMEs and Startups Agency apply a single interest rate of 2.5% through direct loans, with average loan amounts of 284 million KRW for the Korea SMEs and Startups Agency and 36 million KRW for the Small Enterprise and Market Service.

Analysis of the execution performance of the IBK Industrial Bank of Korea and Korea Credit Guarantee Fund program shows an average loan amount of approximately 331 million KRW and a maximum loan amount of 3 billion KRW. By actively utilizing the Bank of Korea’s financial intermediation support loan funds, loans are provided at an average interest rate of 3.91%, including the lowest rate case of 3.16%.

The related ministries plan to continue close management of high-damage companies with losses exceeding 100 million KRW through an emergency response team, as it appears that companies with large damage amounts have a high usage (application) rate of the liquidity support program.