As the economic downturn continues, a growing number of self-employed individuals are closing their businesses, pushing the number of applicants for the debt restructuring program "Saechulbal Fund" past 120,000.
The Korea Asset Management Corporation (KAMCO) and the Credit Counseling and Recovery Service announced on May 13 that, as of the end of last month, the number of applicants for the "Saechulbal Fund," a debt restructuring program exclusively for small business owners and the self-employed, had reached 125,738. The total amount of debt involved is 20.3173 trillion won.
Under the "purchase-type debt restructuring," in which the Saechulbal Fund directly purchases claims and restructures the debt, 33,629 individuals have signed agreements. Their total principal debt amounts to 2.9609 trillion won, with an average principal reduction rate of approximately 70%.
Through the "intermediary-type debt restructuring," which adjusts interest rates and repayment periods without reducing the principal, 37,950 individuals have finalized debt restructuring. The total debt involved is 2.8388 trillion won, and the average interest rate reduction is about 4.7 percentage points.
Meanwhile, the Saechulbal Fund is a debt restructuring program designed to ease the burden on self-employed individuals and small business owners who have suffered losses due to COVID-19 and are struggling to repay their loans. Eligible participants include delinquent borrowers and business owners who have been in long-term arrears for more than three months, those who have closed their businesses, those who have suspended operations for more than six months, borrowers who have used maturity extensions or repayment deferrals but cannot extend further, and borrowers with low credit scores.
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