Ministry of SMEs and Startups Unveils "Faithful Repayment Incentives"
Up to 7-Year Installment Repayment and 1 Percentage Point Interest Rate Reduction
"Policies Must Work in Reality"
Customized Measures Based on Voices from the Field
Han Seong-sook, the Minister of SMEs and Startups, who has set "recovery and safety net establishment for small business owners" as her first policy task since taking office, has launched a series of relay meetings to listen to voices from the field. The Ministry of SMEs and Startups announced that it plans to identify the real difficulties faced by small business owners through these meetings and swiftly incorporate feasible policy tasks.
On July 30, the first meeting was held at the Jungbu Small Business Support Center in Jongno-gu, Seoul, focusing on the topic of financial safety nets. Minister Han stated, "We intend to concretize the vivid voices from the field heard through these meetings and reflect them in policy, and resolve issues that can be improved as quickly as possible," adding, "We will ensure that policies become practical solutions that go beyond the confines of a report and truly work in reality."
Hansung Sook, Minister of SMEs and Startups, is speaking at the '1st Relay Meeting to Strengthen Recovery and Safety Nets for Small Business Owners' held on the 30th at the Seoul Jungbu Center of the Small Enterprise and Market Service in Jongno, Seoul. Attendees at the meeting included small business owners, the president of the Korea Federation of Small and Medium Business, the president of the National Merchants Federation, the president of the Korea Foodservice Industry Association, and the president of the Supermarket Cooperative Federation. Photo by Jo Yongjun
At this meeting, the Ministry of SMEs and Startups unveiled the "Faithful Repayment Incentive Plan." This plan offers a package of up to seven years of installment repayment and a 1 percentage point interest rate reduction to small business owners who have faithfully repaid policy finance loans and guarantees.
For small business owners who have closed their businesses, a separate long-term installment guarantee program will be operated. The installment period, previously limited to seven years, will be extended up to 15 years, and low-interest loans will be provided to reduce the repayment burden. Additional benefits will also be provided to those with a record of faithful repayment, such as an expanded preferential interest rate (from 0.1 percentage point to 0.3 percentage point), an increase in the number of loans allowed (from three times in five years to four times), and opportunities to apply for innovation growth promotion funds.
Linked support will also be provided for small business owners whose management is unstable after receiving policy funds. For those at risk of delinquency, one-on-one consulting will be offered. In cases where business closure or industry transition is necessary, one-stop support will be provided, ranging from tax and labor consulting to demolition costs and re-entrepreneurship education.
Hansung Sook, Minister of SMEs and Startups, is speaking at the '1st Relay Meeting to Strengthen Recovery and Safety Nets for Small Business Owners' held on the 30th at the Seoul Jungbu Center of the Small Enterprise and Market Service in Jongno, Seoul. Attendees at the meeting included small business owners, the president of the Korea Federation of Small and Medium Business, the president of the National Merchants Federation, the president of the Korea Foodservice Industry Association, and the president of the Supermarket Cooperative Federation. Photo by Jo Yongjun
At the meeting, suggestions regarding small business insurance policies were also raised. Moon Daegyu, CEO of ChonggakgwaBada, who suffered damages from a store fire earlier this year, said, "I received 35 million won in support through fire insurance, but the actual damage far exceeded this amount, so I have not yet been able to properly restore the store," adding, "If flood and storm insurance is actively promoted by each market merchants' association, I believe more merchants would actively enroll."
Lee Daegun, Director of the Small Business Policy Bureau at the Ministry of SMEs and Startups, said, "Although the recent expansion of the fire insurance limit cannot be applied retroactively, we will consider expanding the scope in the long term," adding, "In the case of fire insurance, local governments subsidize 60 to 80 percent of the premiums, but the insurance enrollment rate is still only in the mid-30 percent range. To achieve the goal of a 50 percent enrollment rate, not only the merchants' associations but also cooperation at the ministry level for promotion is necessary."
There were also comments on experiencing the effectiveness of the system during the process of restarting after business closure. Hong Minhye, CEO of The Stones, said, "Since last year, I have suffered damages from the Tmon incident and even hacking, which made me seriously consider closing my business earlier this year. However, thanks to the Hope Return Package support, I was able to recover," adding, "In particular, the dedicated PM helped me use the support funds in the best way possible, so I hope there will be more experts like this to help small business owners in crisis."
Ha Eunjung, a consultant in charge of the Hope Return Package consulting, said, "Many business owners are not even aware that there are programs available to support their recovery," adding, "If options for region-specific and industry-specific support programs could be included when registering a business, it would greatly help increase the enrollment rate."
In her closing remarks, Minister Han said, "Through today's meeting, I felt that internal discussions are needed on how to approach digital transformation for small business owners by industry and by stage," adding, "We will work to make the delivery system easier and look into how we can provide more effective support."
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