Baemin Provides Loan Guarantees Worth 30 Billion KRW to Over 1,000 Small Business Owners

Second Phase of the Small Business Owner Agreement Guarantee Loan Program

Baedal Minjok has supported over 1,000 small business owners in just over two months through its agreement guarantee loan program. Woowa Brothers, the operator of Baedal Minjok, announced on the 10th that through the second phase of the small business owner agreement guarantee loan project, which began at the end of January, they have provided loan guarantees exceeding 30 billion KRW to more than 1,000 small business owners by the first week of April.

In January, Woowa Brothers signed a business agreement for a 100 billion KRW agreement guarantee loan program with Kakao Bank and regional credit guarantee foundations. The core of the program is that Woowa Brothers and Kakao Bank each prepared 3.5 billion KRW, totaling 7 billion KRW, to be used as guarantee funds. Based on these funds, the regional credit guarantee foundations issue guarantee certificates to small business owners, and Kakao Bank conducts loan screening and disbursement based on the guarantee certificates.

Maeng Geun-ju, a business owner who has been running a chicken restaurant in Sejong City for 10 years, is posing for a commemorative photo while saying, "The burden of running the store has been greatly reduced thanks to the agreement-guaranteed loan."

Baemin explained that this program garnered high interest from small business owners, with 30% of the target amount being used up in just about two months. This is because small business owners who had difficulty accessing first-tier financial institutions due to credit score issues could receive lower interest rates through the issuance of guarantee certificates backed by guarantee funds. As of the end of March, the proportion of medium- and low-credit users who utilized this program reached 65%.

The introduction of non-face-to-face applications for small business owners who cannot leave their stores also received positive feedback. Previously, applicants had to visit banks and regional credit guarantee foundations in person for face-to-face applications, but 80% of small business owners using this loan guarantee program underwent screening remotely. Additionally, due to local governments’ interest subsidy policies, the effective interest rate was lowered to as low as the 1% range, and support benefits such as a 50% refund on guarantee fees and exemption from early repayment fees significantly lowered the loan barriers for small business owners.

Woowa Brothers plans to continue the agreement guarantee loans until the annual target amount of 100 billion KRW is fully utilized. They also plan to expand the operating regions from the current 13 metropolitan cities and provinces to nationwide. Kim Jung-hyun, Head of Value Management at Woowa Brothers, said, "We will not only expand the operation of the agreement guarantee loan project but also discover and promote activities that can provide more practical help to small business owners."