A survey found that the financial situation of one in two small and medium enterprises (SME) in the country has worsened compared to last year.
The Korea Federation of Small and Medium Enterprises noted that in its '2024 Survey on Financial Use and Challenges of Small and Medium Enterprises' conducted from 3rd to 12th among 500 SMEs, the response indicating that this year's financial situation has 'worsened compared to last year' accounted for 47.2%.
This is an increase from the response rate of 31.7% in the same survey last year.
The proportion of respondents indicating that the financial situation has worsened was higher for corporations with smaller sales. By size of corporation, 55.2% of small corporations responded that it has 'worsened,' while 35.5% of medium corporations said the same.
The causes cited for the worsening financial situation include poor sales, rising prices of raw materials, and increased labor costs.
The most urgent financial support task for small and medium enterprises (SME) is 'expanding policies to ease interest burden,' cited by 38.6%. Following two cuts in the benchmark interest rate by the Bank of Korea, 49.4% of respondents indicated 'no change' regarding fluctuations in loan interest rates, suggesting that the effects of the interest rate cut have yet to materialize.
Regarding the appropriate benchmark interest rate for next year, 61.2% of respondents said a 'cut' is necessary, while 34.8% indicated 'hold.'
The Korea Federation of Small and Medium Enterprises stated, 'It is necessary for commercial banks to lower loan interest rates to reduce the financial burden on SMEs in line with the Bank of Korea's rate cuts.'