Agreement Signed to Establish 35.5 Billion KRW Fund on the 24th,
1.5 Trillion KRW to Be Raised by March
Largest Scale Among Local Governments Nationwide This Year...
Targeting Expansion to 2 Trillion KRW
On the 24th, Pohang City signed a Memorandum of Understanding (MOU) to establish the 'Hope Companion Special Guarantee Fund' worth a total of 35.5 billion KRW to support small business owners struggling with financing amid the global economic downturn and unstable business environment.
In this agreement, the following institutions participated to create a total contribution fund of 1.48 billion KRW: ▲NongHyup Bank (500 million KRW) ▲Hana Bank (500 million KRW) ▲Woori Bank (200 million KRW) ▲Guryongpo NongHyup (100 million KRW) ▲Guryongpo Fisheries Cooperative (100 million KRW) ▲Pohang Fisheries Cooperative (50 million KRW) ▲Ocheon Credit Union (30 million KRW).
Pohang City and financial institutions matched the contributions at a 1:1 ratio, resulting in a total contribution fund of 2.96 billion KRW through this agreement. The Gyeongbuk Credit Guarantee Foundation plans to issue loan guarantees worth 35.5 billion KRW, which is 12 times the contribution amount, to support small business owners' financing.
Additionally, with further contributions from iM Bank in March, Pohang City plans to secure 150 billion KRW of special guarantee funds in the first half of this year to provide early support to small business owners, and aims to secure an additional 50 billion KRW in the second half to achieve the annual target of 200 billion KRW.
With the special guarantee fund nearly doubling to about 200 billion KRW this year compared to 111.4 billion KRW last year, it is estimated that approximately 8,000 beneficiaries will receive support. This is the largest scale nationwide for a basic local government and is expected to be a significant help to small business owners facing management difficulties by providing a much-needed boost to the struggling local economy.
Furthermore, the guarantee scale of the Gyeongbuk Credit Guarantee Foundation has expanded from 10 times last year to 12 times this year, and with the participation of new financial institutions, the number of contributing institutions has doubled, allowing even more small business owners to benefit.
Especially, small business owners in the fisheries, food service, and lodging sectors who participated in the MOU expressed their hopes that the Hope Companion Special Guarantee will serve as a catalyst to resolve funding difficulties and become a pillar supporting the local economy, cheering for the successful implementation of the project.
Small business owners with workplaces in Pohang City can receive loan guarantees up to 50 million KRW for general applicants and up to 100 million KRW for preferred applicants through the special guarantee support project.
Repayment options include a lump-sum payment after 2 years or equal principal installments over 3 years following a 2-year grace period. A 3% loan interest subsidy will be provided for 2 years, with a fixed 100% guarantee ratio and a 0.8% guarantee fee rate to minimize the financial burden on small business owners.
Loans are only available through the contributing financial institutions, and detailed information can be found in the announcement posted on the Pohang City website at the end of February.
Mayor Lee Kang-deok stated, “The Hope Companion Special Guarantee project is a representative win-win model where local financial institutions and local governments cooperate to revitalize the regional economy. We will continue to build a sustainable financial support system to ensure small business owners do not face funding difficulties and do our best to revitalize the local commercial districts.”
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