South Korea Unveils $7.18 Billion Support Plan for Small Businesses

In a significant move to bolster its small business sector, South Korea has introduced a 10 trillion won (approximately USD 7.18 billion) low-interest financing scheme. The initiative, reported by Pulse, aims to support small business owners exhibiting robust repayment histories, easing financial pressures while fostering sectoral growth.

This comprehensive support package sees allocations of 4.5 trillion won for businesses grappling with operational hurdles, 3.5 trillion won for small-business growth, and a further 2 trillion won directed towards startup facility investments. Notably, borrowers maintaining a commendable loan repayment history are set to benefit through increased interest rate reductions, climbing from 1.3 percentage points to between 1.5 and 1.8 percentage points.

The plan outlines expanded guarantee-fee reductions ranging from 0.2 to 0.5 percentage points to further slash borrowing costs. Moreover, the average loan limit for small business owners will see a significant 67% increase, with COVID-19-related support fund limits rising from 60 million won to 100 million won. Collaboratively, the South Korean government and its top five commercial banks aim to boost small business lending significantly, reflecting a targeted approach to sustain economic resilience and employment within this vital sector.