[New Supplementary Budget] Saechulbal Fund Improved... Up to 90% Debt Reduction for Low-Income Delinquent Small Business Owners

Eligible: Total Debt Under 100 Million Won, Income Below 60% of Median
About 100,000 Beneficiaries... 20-Year Installment Repayment Support
New Entrepreneurs After December 2024 Also Included

The government is strengthening debt restructuring support for low-income borrowers who are currently delinquent on their loans. The principal reduction ratio for the "Saechulbal Fund," a debt restructuring program for small business owners, will be increased, and the installment repayment period will be doubled. This decision is based on the judgment that bold debt restructuring, rather than simply extending maturities, is more helpful for the actual recovery of small business owners who lack repayment capacity. Furthermore, the government plans to expand support, taking into account the recent delay in domestic demand recovery due to political and economic uncertainties.

On June 19, the Financial Services Commission announced these measures as part of the "Saechulbal Fund System Improvement Plan." The final details may change depending on the National Assembly's budget deliberations.

The support targets are low-income individuals with a total debt of 100 million won or less, specifically those whose income is at or below 60% of the median income. The 60% median income threshold follows the standard for living expenses required for a humane life in court personal rehabilitation procedures.

Yang Yunyoung, Director of Corporate Restructuring Policy at the Financial Services Commission, explained, "By setting the total debt limit at 100 million won, about 40% of low-income, delinquent small business owners will be eligible for support," adding, "This will maximize the effectiveness of recovery support."

Additionally, small business owners who suffered losses after the December 3 Martial Law Incident last year will also be eligible for support. Originally, only those operating businesses between April 2020 and November 2024 were eligible for debt restructuring support, but the eligibility period has been extended to include those operating as of June 2025.

The principal reduction rate will also be expanded to 90%. Currently, depending on repayment ability, principal can be reduced by 60% to 80%. The installment repayment period will be extended from the current 10 years to 20 years.

The total budget has been set at 700 billion won. This amount covers the additional loss compensation resulting from the system improvements. With the strengthened Saechulbal Fund, approximately 101,000 small business owners are expected to benefit.