FSC Chairman: "Small Business Financial Support Plan Proceeding Smoothly"

Chairman Kim Byunghwan Inspects Implementation of “Banking Sector Financial Support Plan for Small Business Owners”
Visits Shinhan Bank Headquarters to Review Support Cases for Small Business Owners

Kim Byunghwan, Chairman of the Financial Services Commission (left), is attending the Economic Ministers' Meeting held at the Government Seoul Office in Jongno-gu, Seoul on May 8, 2025. Photo by Jo Yongjun

The Financial Services Commission announced that Chairman Kim Byunghwan visited the main branch of Shinhan Bank in Jung-gu, Seoul on May 8 to inspect the implementation of the “Banking Sector Financial Support Plan for Small Business Owners,” which he unveiled at the end of last year.

After the banking sector announced the Financial Support Plan for Small Business Owners at the end of last year to provide sustainable and tailored support, banks implemented each program following about four months of preparation, including product and IT system development, regulatory adjustments, and coordination with relevant ministries and agencies.

On this day, a small business owner who visited the branch, despite not being in arrears and maintaining a normal credit status, expressed concern about a recent decline in sales and requested an interest rate reduction and extension of the repayment period for a 3.5 million won installment credit loan (with an interest rate of 10.73% and 31 months remaining out of an original 54-month term) out of a total 15 million won Shinhan Bank loan.

As a result of the consultation, this borrower was found eligible for the “Small Business Owner 119Plus” program. While the standard interest rate applied to debt adjustment applications is 12%, it was expected that the rate could be reduced to the mid-7% range through this program. In addition, it was anticipated that a long-term installment repayment of up to five years (60 months, including a 12-month grace period) would be possible, allowing for a further extension of the repayment period compared to the original terms. Consequently, the borrower, who had been repaying 130,000 won per month (principal and interest) under an equal principal repayment plan, would be able to reduce the monthly payment to 90,000 won (with the amount gradually decreasing under the equal principal repayment structure), thereby alleviating the loan repayment burden.

Another small business owner who visited the branch had closed their business and hoped for an interest rate reduction and extension of the repayment period for a 30 million won business credit loan (with an interest rate of 4.7% and six months remaining out of an original 12-month term). Since this loan was issued before December 23, 2024 (the date the Financial Support Plan for Small Business Owners was announced), it was eligible for the Business Closure Support Refinancing Loan. As the outstanding balance was under 100 million won, it also qualified for an interest rate reduction. As a result, the borrower was able to apply for refinancing at an interest rate of 2.84% with a maximum installment period of 30 years.

Chairman Kim Byunghwan stated, “After listening to the two cases today, it seems that both principal and interest payments due each month can be significantly reduced through debt adjustment, and it is even possible to repay both principal and interest at the current interest payment level. We will continue to actively work with the financial sector to support small business owners.”

He added, “I would like to thank the banking sector and all staff for preparing and implementing the Financial Support Plan for Small Business Owners as scheduled. Please ensure that branch employees are fully familiar with the program so that small business owners do not face difficulties during consultations, and that no one misses out on applying for support simply because they are unaware of the available programs.”

Attending the site visit were Jin Okdong, Chairman of Shinhan Financial Group, Lee Jaeyeon, President of the Korea Inclusive Finance Agency, and Lee Taehun, Executive Director of the Korea Federation of Banks.

Chairman Jin Okdong emphasized, “Shinhan Financial Group and Shinhan Bank will do their utmost as a private company to help stabilize people’s livelihoods.” He explained, “Among Shinhan Bank customers, there is someone with a 90 million won credit loan at a 6% interest rate, who is currently paying 430,000 won in monthly interest and would have to repay the entire 90 million won principal at maturity. If this customer closes their business, their monthly interest burden would drop to 220,000 won, and even including principal, the total monthly payment would be just 390,000 won, which is less than the current interest payment.” He added, “For small business owners who continue to operate, we will not only provide active financial support, but also create synergy by linking non-financial services such as the Shinhan SOHO Academy and Ttaenggyeoyo.”

President Lee Jaeyeon commented, “To launch Saessallon 119, the banking sector has prepared a total of 300 billion won in contributions over three years, with 100 billion won each year, and the Korea Inclusive Finance Agency has reduced the guarantee fee rates that borrowers must pay. This is a good example of the financial sector and policy finance institutions joining forces to support small business owners.” Executive Director Lee Taehun stated, “After implementing the program, we will continue to listen to feedback from the field, make necessary improvements, and enhance the program. In addition, we will work closely with public institutions and private companies to provide consulting services through the banking sector to strengthen the self-sufficiency of small business owners and implement practical measures to support them.”