The number of applicants for the debt restructuring program 'New Start Fund' targeted at business owners who have closed down has approached 120,000. This is interpreted as a result of a surge in business closures due to the economic downturn.
Korea Asset Management Corporation (KAMCO) reported on the 9th that the cumulative number of applicants for the New Start Fund debt restructuring program stood at 119,768 as of the end of last month, with the total debt amounting to 19 trillion 368.4 billion won. The cumulative number of applicants for the New Start Fund increased steadily from 103,658 at the end of last year to 108,387 in January, 113,897 in February, and 119,768 in March.
The total debt amount applied for has also sharply increased from 16 trillion 730.5 billion won at the end of last year to 17 trillion 500.4 billion won in January, 18 trillion 406.4 billion won in February, and 19 trillion 368.4 billion won in March. As of the end of last month, among all applicants for the New Start Fund debt restructuring program, 32,293 people (with a debt principal of 2 trillion 818.5 billion won) signed an acquisition type debt restructuring agreement. The average principal reduction rate was approximately 70%. The acquisition type involves the New Start Fund directly purchasing the bonds and restructuring the debt.
The intermediary type debt restructuring, which adjusts interest rates and repayment periods without principal reduction, was signed by 35,910 people (with a debt amount of 2 trillion 683.4 billion won). The average interest rate reduction was about 4.7 percentage points. The New Start Fund is a debt restructuring program exclusively for small business owners and self-employed individuals, adjusted according to the speed of their repayment capacity recovery.