378 Billion Won for Revitalizing Local Commercial Districts... Ninefold Increase
Loan Support Budget Cut by 408 Billion Won
"Reducing Short-Term Aid, Focusing on Laying the Foundation"
The government has set "revitalizing local commercial districts" as the core direction for small business support policies next year and has significantly increased the related budget. In contrast, the budget for loans, which provide financial support to small businesses, has been reduced. This indicates a shift from short-term support measures aimed at livelihood maintenance to focusing on fostering the self-sufficiency of small businesses centered around local commercial districts.
According to the Ministry of SMEs and Startups on December 30, the budget for revitalizing local commercial districts among small business support projects has increased more than ninefold, from 4 billion won this year to 37.8 billion won next year. This marks the largest increase among all small business programs. Specifically, new projects such as the Glocal Commercial District (15 billion won), Local Hub Commercial District (10 billion won), and Promising Alley Commercial District (12.5 billion won) have been established, significantly raising the total budget. These projects are scheduled to be officially implemented after individual announcements by the Small Enterprise and Market Service in February next year.
Revitalizing local commercial districts has been one of President Lee Jaemyung’s key priorities since the presidential campaign. President Lee has included "Commercial District Renaissance 2.0" as a national agenda item and has emphasized the need to foster neighborhood commercial districts that reflect local characteristics as a new growth engine for the domestic economy. Han Seongsuk, Minister of SMEs and Startups, and Lee Byungkwon, Second Vice Minister, have also identified revitalizing local commercial districts as a main task for the small business sector through initiatives such as the "Small Business Growth Relay Roundtable." Based on this broad consensus, it is expected that from next year, policy efforts will focus on strengthening the economic foundation centered on small businesses and neighborhood commercial districts.
An official from the Ministry of SMEs and Startups stated, "There was a consensus in both the government and the National Assembly that revitalizing local commercial districts should be intensively supported," and added, "While many new projects have been established or received increased budgets, such as the new AI utilization support program for small businesses with a budget of 14.3 billion won, this is the only project with such a significant increase."
While this year’s small business budget from the Ministry of SMEs and Startups has been set at a record high of 5.4 trillion won, the sharp reduction in the loan support budget has drawn attention. The policy loan budget for small businesses will decrease by about 408 billion won, from 3.77 trillion won this year to 3.362 trillion won next year. More specifically, the specialized funds for small manufacturers will be cut by more than half, from 450 billion won to 200 billion won, and the win-win growth support fund, which was newly established last year to support marketing for small businesses entering online platforms, will be reduced by 24%, from 100 billion won to 76 billion won.
This has led to the assessment that the Ministry of SMEs and Startups is shifting its policy focus from survival-oriented loan support to fostering the self-reliance of small businesses. This aligns with the ministry’s new policy direction for next year, which is "performance-oriented, focused support." At the 2026 work briefing held on December 17, Minister Han announced plans to selectively allocate policy resources to companies with outstanding growth potential starting next year. The ministry is signaling a policy shift away from "life-support loans" that rely on short-term liquidity supply, toward creating an ecosystem where competitive small businesses can be naturally discovered and grow.
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