The Ministry of SMEs and Startups said on the 21st that after conducting a policy priority evaluation on about 40,000 applications for the "Credit-vulnerable microbusiness fund" received on the 21st of the previous month, it selected about 3,000 cases for loan screening.
The credit-vulnerable microbusiness fund is a policy fund that supports up to 30 million won for microbusiness owners with low to mid credit who have difficulty using private financial institutions (NCB 839 points or lower). The interest rate for the second quarter of this year is 5.04%.
The fund had been operated on a first-come, first-served basis that closed when the budget was exhausted. As applicants flooded in right after the start of acceptance, it closed in about five minutes or the policy fund website repeatedly experienced access disruptions. Some microbusiness owners waited at PC rooms during business hours.
The Ministry of SMEs and Startups (MSS) introduced a policy priority evaluation system starting in April to improve the issue. After receiving applications for a set period, it selects support recipients by comprehensively evaluating credit scores, history of receiving policy funds, whether they are in non-capital or population-declining areas, years in business, and other factors.
The Ministry of SMEs and Startups (MSS) applied the new method for the first time and accepted applications over two days on Apr. 20–21, and more than doubled the server capacity from before. Despite more than 40,000 applications, the policy fund website operated without disruptions.
The policy priority evaluation resulted in increased shares of low-credit applicants, non-capital regions, and early-stage founders. Compared with January–March, which operated on a first-come, first-served basis, the support ratio for low-credit applicants (NCB 744 points or lower) rose by about 67 percentage points. Among the selected businesses, 77.1% were located in non-capital and population-declining areas, up more than 27 percentage points from before.
The share of early-stage founders with less than three years in business also rose to 78.6%, up 25 percentage points from before. The share of microbusiness owners who had never received policy funds likewise increased by about 12 percentage points to 93.1%.
The Ministry of SMEs and Startups (MSS) notified applicants of the selection results on Apr. 29. For the selected businesses, it plans to conduct loan screening and disburse funds by the end of this month. The next round of applications will be held on June 15–16.
An official at the Ministry of SMEs and Startups (MSS) said, "This institutional overhaul is intended to reduce the inconvenience microbusiness owners face during the application process while prioritizing support for those for whom raising funds in the private financial sector is relatively difficult," adding, "We will continue to improve the system by consistently checking and analyzing support data so that policy funds can be operated in line with their original purpose."