Kim Byunghwan: "Financial Support for Small Business Owners through Employee Exemption and Sandbox Allowance"

Financial Support Meeting for Small Business Owners in the Banking Sector

Kim Byung-hwan, Chairman of the Financial Services Commission, stated on the 23rd, "The financial authorities will actively take necessary measures such as exemption from liability and exceptions in household debt management targets to enable banks to more smoothly support small business financing," adding, "We will also promote the expansion of banks' business scope through the use of sandboxes and allowing ancillary businesses."

On the same day, at the 'Banking Sector Small Business Financial Support Meeting' held at the Bankers' Hall in Jung-gu, Seoul, Chairman Kim said, "During the process of overcoming COVID-19, small business debt has significantly increased and interest rates have risen, so the financial burden on small business owners remains substantial." He noted that support measures such as the New Start Fund and interest cashback (refund) have been implemented, but acknowledged, "It is true that there are some shortcomings in systematic support for small business owners who have faithfully paid their interest."

Financial Services Commission Chairman Kim Byung-hwan is giving an urgent briefing on current issues at the Financial Services Committee held by the National Assembly's Political Affairs Committee on the 18th. Photo by Kim Hyun-min

Accordingly, through the meeting, various small business financial support measures by the banking sector were announced, including ▲ customized debt adjustment for borrowers before delinquency ▲ low-interest, long-term installment repayment programs for closed businesses ▲ win-win guarantees and loans ▲ introduction of banking sector consulting programs, along with various regulatory relaxation measures to support these initiatives. The meeting was attended by Oh Young-joo, Minister of SMEs and Startups, Lee Bok-hyun, Governor of the Financial Supervisory Service, Cho Yong-byeong, Chairman of the Korea Federation of Banks, and presidents of 20 member banks.

Chairman Kim said, "The support measures prepared by the banking sector aim to introduce a new model that allows small business owners who are repaying loans faithfully before delinquency or those intending to close their businesses to repay loans slowly over a long period, and to provide funding and consulting tailored to the borrower's situation," expressing hope that "this will fill the gaps with more sustainable, customized support measures."

He explained, "Although banks may feel a burden in the short term, if faithful repayment is made and the possibility of delinquency or default decreases, it is a more mutually beneficial measure in terms of reducing debt risk for banks, small business owners, and the overall economy."

Furthermore, he said, "The financial authorities received requests from financial companies and last week announced proactive measures to strengthen financial stability and support for the real economy, such as postponing the introduction of stress buffer capital," adding, "As these measures increase the financial capacity of banks, I hope that along with liquidity and soundness management, the role of supplying funds to the real economy, including small business owners, low-income groups, and companies, will also be expanded."