The number of self-employed individuals closing their businesses has surged due to the economic recession, leading to the largest ever payout of business closure compensation for small businesses.
According to the Korea Federation of Small and Medium Enterprises, as of the end of last month, 1.3019 trillion won in yellow umbrella business closure compensation has been paid out this year. This represents a 10.1% increase from the 1.1820 trillion won disbursed during the same period last year, marking the highest amount ever.
The scale of compensation paid by the regional credit guarantee foundations for the debts of small businesses that cannot repay their bank loans has also increased significantly.
According to materials received from the Korea Credit Guarantee Fund by Democratic Party lawmaker Oh Se-hee, compensation paid by credit guarantee funds has risen from 507.6 billion won in 2022 to 1.7126 trillion won last year, more than tripling in one year, and it surged to 2.0578 trillion won by October of this year.
According to the National Tax Service, the number of businesses that reported closure last year was 986,487, the highest since the count began in 2006.