Exterior view of the National Credit Union Federation of Korea building. Provided by the National Credit Union Federation of Korea
The National Credit Union Federation of Korea announced on October 17 that it has signed a business agreement with the Korea Federation of Credit Guarantee Foundations to support the alleviation of repayment burdens for small enterprises and small business owners by restructuring loan repayments upon maturity.
The conversion guarantee is a type of guarantee that allows existing loans backed by local credit guarantee foundations to be converted into new guaranteed loans through the issuance of a new guarantee certificate. This reduces the repayment burden by adding a grace period or extending the repayment period for existing loans. The National Credit Union Federation of Korea explained that it is the first among community finance institutions to introduce the conversion guarantee system.
With this agreement, conversion guarantee applications are now available at over 110 credit unions nationwide. Local small business owners can visit their nearest credit union branch for consultation and to apply. The National Credit Union Federation of Korea plans to fully waive prepayment fees incurred when repaying existing guaranteed loans and offer a 0.2% reduction in guarantee fees for borrowers with low credit scores (CB744 or below).
Cho Yongrok, Head of the Financial Support Division at the National Credit Union Federation of Korea, stated, "Through this conversion guarantee business agreement, we aim to strengthen our social role as a community financial institution and provide practical support to small business owners, who are key players in the local economy."
© The Asia Business Daily(www.asiae.co.kr). All rights reserved.
