Support for Interest and Guarantee Fees
Gwangju Nam-gu (District Mayor Kim Byungnae) announced on the 17th that it will urgently provide financial support totaling approximately 4.8 billion KRW to help small business owners facing management difficulties due to the economic downturn, high interest rates, and rising prices.
The amount of financial support for small business owners in the region this year is 4.76 billion KRW.
The district plans to sign business agreements with financial institutions on the 21st and 26th to provide these funds. On the 21st, it will sign a business agreement with the Gwangju Credit Guarantee Foundation and Gwangju Bank for special guarantee support.
Nam-gu and Gwangju Bank will each provide contributions of 180 million KRW and 100 million KRW, respectively, to the Gwangju Credit Guarantee Foundation so that local small business owners can secure funds from financial institutions. The Gwangju Credit Guarantee Foundation will then allocate 3.36 billion KRW, which is 12 times the contributed amount, as guarantee support funds.
Additionally, the district will inject an extra 157.92 million KRW to support small business owners with financial interest costs and guarantee fees. If small business owners borrow funds through the special guarantee, the district office will fully cover 4% interest and an annual guarantee fee of 0.7% incurred during the loan process. Thus, if local small business owners receive loans at interest rates of 5-6% based on personal credit, they only need to pay 1-2% in interest. Furthermore, those using the special guarantee at Gwangju Bank can benefit from an additional preferential interest rate of 1%.
In addition, five local Saemaeul Geumgo branches?Mujin, Gwangnam, Seoyang, Juwol, and Wolsan?will sign a Hope Loan agreement at the district office on the 26th to support small business owners. These Saemaeul Geumgo branches will provide a total of 1.4 billion KRW at an interest rate of 5.5% until February 28 next year, and Nam-gu will separately provide 63 million KRW this year to support up to 4.5% of the interest for small business owners.
Until last year, the interest support rate for small business owners was 4%, but as the economic situation worsened rapidly this year, the rate was raised by 0.5%.
A district official stated, "We expect that the implementation of the special guarantee and Hope Loan support projects will help ease the financial difficulties of small business owners to some extent," and added, "We will do our best to ensure that small business owners can overcome the crisis and contribute to revitalizing the local economy."
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