The 2nd SME Financial Support Committee reviewed the current status of financial difficulties for SMEs and small businesses facing complex crises due to high exchange rates and high prices in addition to the recent rapid increase in interest rates, and discussed support schemes for SMEs and small businesses. businesses.
This financial support committee includes KB Bank CEO Kookmin Lee Jae-geun, Woori Bank President Lee Won-deok, Hana Bank President Park Seong-ho, IBK Industrial Bank President Yoon Jong-won, NH Bank CEO Nonghyup Kwon Joon-hak, Shinhan Bank CEO Jin Ok-dong, and heads of associations and organizations involved in small and medium enterprise companies such as the Korea Federation of Small and Medium Businesses and the Enterprise Business Association, and small enterprise companies and medium. policy and financial organizations such as the Korea Business Promotion Corporation and the Small Enterprise and Market Corporation were present.
At this meeting, discussions were held on ‘direction to respond to financial difficulties for SMEs and small businesses*’ and ‘preparation of financial support measures to overcome high interest rates**’.
* Based on a survey of financial difficulties carried out by small and medium-sized enterprises and 546 small and medium-sized enterprises (SMEs) and small businesses
** Based on a survey conducted by the Korea Federation of Small and Medium Businesses targeting SMEs
Firstly, as a result of a survey carried out by three SME policy finance organisations, 52.7% (288 companies) responded that their financial situation had worsened compared to the previous year, which is approximately three times the number of 17.2% who responded that it has worsened. get better
384 companies (70.9%) of the respondents increased the amount of their loans compared to the same period the previous year, and 326 companies (60.4%) of the respondents raised their loan interest rates by more than 2% compared to with the same period of the previous year..
In addition, 43% of survey respondents answered that it would be difficult to repay the interest or principal and interest of the loan if it were to rise by 3% to the loan interest rate currently applied.
Also, 51.8% of respondents said that interest repayment is burdensome with the current operating profit due to the recent increase in interest rates, accounting for more than half of the companies that responded.
In terms of measures to help companies overcome the third highest crisis, easing the burden of interest rates and new working capital loans accounted for 38% and 31%, respectively.
Meanwhile, following the discussion on the results of the survey, the Ministry of Small and Medium Businesses and Startups published a response plan to solve the financial difficulties of small and medium businesses and small business owners.
First, establish a long-term response plan for a complex SME crisis.
The ‘Corporate Risk Response TF’, which had been implemented by the Ministry of Small and Medium Businesses and New Businesses and related organizations since the end of June, has been expanded and reorganized into the ‘3rd High Complex Crisis Extended Response TF’ from November this year, where external research organizations and private experts participate. In addition, it intends to prepare countermeasures for the tasks discovered through the 3rd High School Complex Crisis Response TF.
Second, liquidity is delivered in the right place through SME policy funding.
In addition to high interest rates, emergency self-sufficiency will be provided first to companies experiencing double difficulties such as exchange rate fluctuations and rising raw material prices, and SME policy funds will be prioritized on supporting the growth of innovative companies such as start-ups super gap. More details will be announced in December.
Thirdly, strengthen the pre-emptive response system for companies at risk of insolvency by linking systems, data and policy resources with related institutions in the financial sector.
It is a plan to help companies that are at risk of insolvency but are expected to be able to normalize their business management by linking the crisis support policies of the Ministry of Small and Medium Businesses and New Businesses, such as financing and consulting, to the Association’s debt restructuring system. financial sector to help them recover quickly.
Minister Lee Young said, “As the difficulties of SMEs and small businesses worsen due to the rapid increase in interest rates, the private sector and the government should cooperate to respond to the financial risks of SMEs and small businesses such as they can be effective. support.”
In addition, he said, “I hope banks will share their wisdom with the TF run by the Ministry of Small and Medium Enterprises and Startups.”
“This Financial Assistance Committee will be a venue for gathering practical measures to help SMEs and small business owners to overcome difficult conditions, and I encourage the participating financial policy institutions and commercial banks to provide support for small and medium businesses and small business owners,” he added.
