Input 2020.12.23 06:00
According to the financial authorities on the 23rd, the Financial Services Commission and the Financial Supervisory Service decided to discuss the end of financial support measures for SMEs and small businessmen affected by Corona 19 starting this week. The financial authorities decided to come up with a soft landing plan for financial support measures after hearing opinions from the financial sector, industry, and experts from January next year. The financial authorities are clearing their positions before proceeding with the discussion in January next year.
In March, the government ordered all financial sectors to extend loan maturity and postponement of interest repayment for SMEs and small business owners suffering from the Corona 19 crisis. This measure was initially scheduled to end in September, but was extended once to March next year as the Corona 19 incident prolonged.
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However, the trend is changing as more than 1,000 new cases of Corona 19 occur every day and the social distancing stage has been strengthened. The financial authorities assume even the worst-case scenario, leading to worsening management of SMEs and small business owners → poor loans related to the financial sector → worsening the soundness of financial companies if financial support measures are temporarily terminated. In the financial authorities, a plan to extend financial support measures for each borrower is also being discussed.
An official from the financial authorities said, “With the reinforcement of social distancing in the metropolitan area, even at the end of the year, the difficulties of small and medium-sized businesses and small businesses are intensifying.” I won’t.” The official said, “However, extending financial support measures to borrowers who do not have the ability to repay is only to delay the insolvency, so it is necessary to prepare more detailed soft landing measures.”
In the financial sector, there are many opinions that a soft landing of financial support measures should be induced by extending the maturity of loans but repaying the principal and interest in long-term installments. It is a way to reduce the likelihood of financial insolvency while reducing the burden on borrowers. However, the financial sector also agrees that it is unreasonable to apply these measures to all borrowers at once.
Accordingly, some financial companies are considering ways to carry out corporate improvement work (workout) or rehabilitation procedures depending on their repayment capabilities in the case of SMEs. SMEs with repayment ability will repay the principal and interest of loans in a long-term installment, while those that do not will undergo restructuring.
Small business owners also have several repayment programs tailored to the borrower’s repayment ability, so that the borrower can choose a program that suits them. Borrowers who have difficulty repaying their debts are encouraged to use government rehabilitation procedures such as free workouts.
An official in the financial sector said, “We are internally reviewing the loan management plan for SMEs and small business owners, and some measures are being implemented.” I think this will come out.”
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