Daejeon City to Intensively Support Small Businesses...Increased Budget and Ultra-Low Interest Special Funds Expanded

Support Budget for Small Business Owners Increased by 52.7%... Ultra-Low Interest Special Fund Expanded to 600 Billion KRW
Mayor Lee Jangwoo: "Comprehensive Support Policies Will Be Implemented for Small Business Owners and the Self-Employed"

Lee Jangwoo, mayor of Daejeon, is announcing support measures for small business owners on the morning of the 21st. Photo by Park Jongmyung, Daejeon

Daejeon City will expand its budget for supporting small business owners to 73.3 billion KRW this year, a 52.7% increase from last year's 48 billion KRW, to help overcome the crisis in the local economy.

On the 21st, Daejeon Mayor Lee Jangwoo announced that the city will implement significantly strengthened, customized support programs for small business owners, such as expanding ultra-low interest special funds, increasing and improving rent and labor cost support, introducing card payment communication fee subsidies, and expanding joint delivery systems. These programs will be provided step by step under four categories: crisis overcoming, growth promotion, specialized support, and business recovery support.

As the first step, the city will expand financial support for overcoming business crises to its largest scale ever. The “Daejeon-type Ultra-Low Interest Special Fund for Small Business Owners,” first introduced last year, will be increased from 400 billion KRW to 600 billion KRW this year. The loan limit per business will also be raised from 50 million KRW to 70 million KRW, with an annual interest rate of 2.7% supported for two years.

Special guarantee programs will also be implemented, significantly easing guarantee requirements for small business owners in the five major sectors closely related to daily life?wholesale and retail, food and beverage, accommodation, and service industries?as well as for young small business owners, who have been hit hard by reduced consumption.

Additionally, to ease the burden of rising costs for small business owners, the city will provide a set of three fixed cost supports: rent, labor costs, and card payment communication fees.

Rent support for small business owners with annual sales below 50 million KRW will be doubled from 300,000 KRW last year to 600,000 KRW this year. For small business owners with annual sales below 300 million KRW, if they retain newly hired employees working at least 60 hours per month for more than three months, they will receive up to 1.5 million KRW per employee for up to two employees. For the first time in the country, up to 110,000 KRW will also be provided for wired and wireless card payment communication fees.

Furthermore, to support the safe livelihoods of small business owners and self-employed individuals, the city will continue to provide up to 1.02 million KRW for paid sick leave during hospital stays, up to 360,000 KRW as incentives for joining the Yellow Umbrella Mutual Aid Fund, and ongoing support for employment and industrial accident insurance premiums.

As the second step, the city will promote business improvement, market expansion, and traditional market environment improvement projects to foster the growth of small business owners.

For the representative business improvement program, the “Self-Employed Doctor Program,” the self-pay ratio for facility improvement costs will be reduced from 20% to 10%, and the maximum support amount will be increased from 2.5 million KRW last year to 3 million KRW this year. The maximum support for business closure restoration costs will also be raised from 2 million KRW last year to 2.5 million KRW this year.

In addition, the joint delivery system, which was established in eight traditional markets last year, will be expanded to ten markets, with delivery vehicles (including drivers) and dedicated staff assigned. Rider delivery (2,000 KRW per delivery, about 31,000 deliveries per month) will be supported for all 65 traditional markets, shopping streets, and alley-type shopping areas.

With the recent expansion of online consumption culture, the city will increase real-time broadcast sales through the “Live Daejeon Marketplace” live commerce platform. Within this year, a Daejeon-specialized online promotional hall will be established on major e-commerce platforms to support the nationwide promotion and sale of local small business products.

Additionally, during holidays, customers who purchase agricultural, livestock, or marine products at any of the 12 small traditional markets will receive up to 20,000 KRW per person as Onnuri gift certificates.

The city will also push forward with projects to improve traditional market facilities and parking environments. In relation to the traffic block at Yudeunggyo, to minimize inconvenience for customers at Doma Large Market, the construction period for the third parking lot will be shortened from three years to two, and 5 billion KRW in construction costs will be allocated early.

As the third step, Daejeon-type specialized support projects to overcome low birth rates will be actively promoted.

In November last year, Daejeon City signed an agreement with KB Financial Group and the Federation of Korean Industries to support small business owners in response to the low birth rate. The six specialized support projects include: parental leave substitute labor cost support (200 million KRW), child care service copayment support (160 million KRW), single small business owners' matchmaking support (100 million KRW), health checkup cost support (220 million KRW), infertility treatment cost support (100 million KRW), and postpartum health support (220 million KRW).

Mayor Lee Jangwoo stated, "Along with the significant expansion of this small business support program, we will do our utmost to ensure rapid implementation that small business owners can truly feel," adding, "We will continue to provide comprehensive support policies for small business owners and the self-employed until local business conditions stabilize and the spark of the local economy is reignited."