The Korea Federation of Small and Medium Enterprises said on the 11th it will provide "Lunar New Year funds" to small and midsize enterprises and small business owners enrolled in the mutual aid fund ahead of the holiday.
Eligible recipients are members who have been enrolled in the fund for at least one month, and based on the amount of contributions paid, they can borrow up to three times their contributions within a limit of 20 million won for Lunar New Year funds. The lending rate averages 5.6%.
If the loan qualifies as an interest subsidy loan in which the government or a local government covers part of the interest, borrowers can receive an additional rate cut of up to 2 percentage points. Sole proprietors can quickly access unsecured credit loans through a non-face-to-face agreement after submitting loan documents.
For amounts exceeding 20 million won, additional unsecured credit loans of up to three times the amount of contributions paid are available after a separate review, depending on the credit rating.
The mutual aid fund for small and midsize enterprises is a system introduced in 1984 under the Small and Medium Enterprise Cooperatives Act. It provides financial support using contributions paid by small and midsize enterprise owners as resources. Members can use financial support such as holiday funds and disaster relief funds, as well as working capital loans, facility loans, real estate collateral loans, bills and checks loans, and dishonored bills loans.
About 17,600 small and midsize enterprises and small business owners nationwide are currently enrolled in the mutual aid fund. KBIZ has expanded the scale of support every year and backed about 744.3 billion won in loans last year.
Lee Chang-ho, head of the mutual aid business division at KBIZ, said, "We hope that small and midsize enterprises and small business owners facing difficulties due to sluggish domestic demand can conveniently use holiday funds through the mutual aid fund," adding, "Going forward, we will continue to improve the system so that loans can be obtained immediately upon enrollment."
Details on enrollment in the mutual aid fund and loans can be found through the Korea Federation of Small and Medium Enterprises customer center, the official website, or the mobile application (app).