Seoul will invest KRW 4 billion in vulnerable small businesses encountering difficulties due to recently weakened domestic demands and recession and offer support with a low annual interest rate of 1.8% in the second half of 2018.
Seoul’s representative small-loan finance support policy ‘Seoul Microcredit’ will offer funds to preparatory entrepreneurs of the financially neglected class who cannot easily access institutional finances and to small and medium-sized businesses for business establishment and management stability at a low interest rate without collateral while providing economic education and consulting.
The ‘Seoul Microcredit’ support project was launched in March 2012 and welcomes its seventh year this year. As of June 2018, the project supported 2,180 enterprises (shops) with a total of KRW 46.2 billion in funds.
The support fund for each person is up to KRW 30 million for startups and up to KRW 20 million for management stability, given based on the owner equity and credit rating. Small businesses that receive loans can repay the loans in four-year installments after leaving the loan unredeemed for one year.
Small business owners in Seoul over 20 years of age with less than an annual income of KRW 30 million who is of the low-income bracket, a single-parent household, a multiple children household, a recipient of basic living, of the near poverty class, unemployed, disabled, a matriarch, of a multicultural family, a North Korean refugee or completed the savings in the ‘Seoul Kkumnarae Saving Account’ may apply.
The ‘Seoul Microcredit’ is differentiated from other loan supports in that it offers step-by-step support from fund support to management consultation in order to create a basis for practical economic independence. After the monetary support is provided, a civil organization with knowledge and expertise will regularly visit business places every month to offer customized consultation and aid with strengthening the competitiveness of businesses.