SME Mutual Aid Fund Offers Lunar New Year Loans at an Average Interest Rate of 5.6%

Loans of up to 20 million won for SMEs and small business owners enrolled in the mutual aid fund

The Korea Federation of SMEs announced on the 11th that it will provide Lunar New Year holiday funds to small and medium-sized enterprises and small business owners that are enrolled in the SME Mutual Aid Fund.

Exterior view of the Korea Federation of SMEs

Subscribers to the mutual aid program (with at least one month of enrollment) can take out a Lunar New Year holiday loan of up to 20 million won at an average interest rate of 5.6%, within a limit of up to three times the total amount of their contributions.

If the loan qualifies for interest support from a local government, the interest rate can be reduced by up to 2 percentage points. Sole proprietors can conveniently and quickly obtain unsecured credit loans through a non-face-to-face agreement process after submitting the required loan documents.

For loans exceeding 20 million won, unsecured credit loans of up to three times the total amount of contributions can be provided after a review, depending on the borrower’s credit rating.

Introduced in 1984 under the Framework Act on Cooperatives of Small and Medium Enterprises, the SME Mutual Aid Fund is a mutual aid program that supports loans using contributions paid by SME owners. When they need a lump sum or working capital, they can use various loan products such as holiday funds, disaster relief funds, facility funds and other operating capital loans, as well as real estate mortgage loans, bill and check loans, and dishonored bill loans.

Approximately 17,600 small and medium-sized enterprises and small business owners nationwide are currently enrolled, and loan support has been expanded every year, with about 744.3 billion won provided over the one-year period in 2025. The mutual aid fund is running a promotion to help SMEs and small business owners prepare for potential cash flow difficulties, under which those who enroll by the end of February will receive Onnuri Gift Certificates.

Detailed information on enrollment in the mutual aid fund and available loans can be found through the Korea Federation of SMEs customer center, website, and mobile app.

Lee Changho, Head of the Mutual Aid Business Division at the Korea Federation of SMEs, said, "We hope that small and medium-sized enterprises and small business owners struggling due to sluggish domestic demand will be able to conveniently use the mutual aid fund to cover their shortfall in holiday funds," adding, "We will continue to improve the system so that loans can be provided immediately upon enrollment in the future."