The Financial Services Commission will announce the final plan next week
“Three years of loan, extension of principal and interest” for one year
Review of differentiation on a per borrower basis rather than in bulk
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The government has decided to concretely extend the loan maturity extension and the deferral of principal and interest payments for SMEs and small business owners, which are due to expire at the end of this month. However, they are known to be considering differentiating measures such as extending the loan maturity and extending the principal and interest repayment grace depending on the borrower, rather than a lump-sum re-extension as in the past.
A Financial Services Commission official said on the 20th: “We are currently coordinating views with the financial sector” and “We will reveal the final plan next week.” Some talk about extending the loan balance maturity by three years and extending the deferred payment of principal and interest by another year. Depending on the situation of each borrower, the borrower is very likely to have the choice between extending the loan maturity or the Startup Fund, a debt adjustment program for self-employed and small businesses that will be launched on the 4th of the next. month. Since the start-up fund is limited to self-employed and small business owners, support measures are also sought for small and medium-sized enterprises. Meanwhile, the financial sector argued that “deferred interest payments should be ruled out as it is necessary to filter out marginal companies even if extended”.
Measures to extend the maturity of small business loans and to defer repayment of principal and interest were first implemented in April 2020 to support small business owners who are experiencing financial hardship as a result of COVID-19 and have been extended four times so far. At the end of January of this year, the balance of small business loans that received support for maturity extension, repayment deferral and interest deferral stood at 133.3 trillion won. These included 116.6 trillion won in term extension, 11.7 trillion won in deferred principal repayment and 5 trillion won in deferred interest payments. Support measures were about to end at the end of this month, but the need for a new extension increased again as concerns over high interest rates, high inflation and economic recession increased. On the 15th, President Yoon Seok-yeol met with Kim Joo-hyeon, chairman of the Financial Services Commission, and Lee Bok-hyeon, head of the Financial Supervisory Service, and ordered the financial authorities to actively consult with the financial sector so that the repayment burden for small business owners would not have increased. Both ruling and opposition parties, including the Democratic Party, have urged financial authorities to find countermeasures.
The song of the journalist Soo-yeon
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