Government to Forgive 480 Billion Won of Small Business Debt | Be Korea-savvy

Government to Forgive 480 Billion Won of Small Business Debt

(image: kobizmedia)

(image: kobizmedia)

SEOUL, Jul. 23 (Korea Bizwire)The government has decided to acquire 480 billion won of debt incurred over 10 years ago by small business owners, of which most will be written off.

Meanwhile, an additional 1 trillion won will be pumped into the “Make it Happen” loan program for small business owners, which was exhausted early on.

According to the Financial Services Commission and the Ministry of Strategy and Finance, the new measure is designed to aid small business owners who are said to be most negatively affected by the recently announced minimum wage hike and the slowing economy, which has dragged income and profits down.

Read More : Record Number of South Koreans Resort to Debt Settlement

The government will be writing off most of the 480 billion won worth of debt incurred by over 35,000 small business owners who are currently unable to pay back their loans.

Separate from this measure, a special loan for entrepreneurs initially offered by the Industrial Bank of Korea and exhausted early due to the popularity of its low interest rate will be available once again as the government raises the limit of the loan products temporarily to aid, through raised liquidity, entrepreneurs who are having a hard time coping with another minimum wage hike.

Interest rates for business with fewer than 10 permanent workers will be lowered by 1 percentage point. Interest rates for loans with collateral will be between 3 percent and 4 percent, while normal loans will see expected interest rates of 5 percent to 6 percent.

An official at the Financial Services Commission said that it is trying to expand support to help smaller businesses.

“Measures to take care of insolvent loan obligations are in the works so that entrepreneurs can get back on their feet,” said the official.

H. S. Seo (

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