S. Korea to offer debt relief to small biz owners hit by COVID-19 pandemic

Seoul, South Korea - In response to the impact of the COVID-19 pandemic on small businesses, the South Korean finance ministry announced a debt relief program on Friday. Finance Minister Koo Yun-cheol revealed the initiative during a meeting with key ministers, in light of recent interest rate hikes by the Bank of Korea aimed at controlling inflation. The central bank recently raised its benchmark rate by 0.25 percentage point for the second time in a row.

The new program aims to support small business owners and individuals by restructuring and rehabilitating their debt. The ministry hopes to help these entities quickly recover and regain their financial stability. Koo emphasized that the government intends to proactively restructure debt, providing step-by-step assistance to those who received financial aid during the pandemic.

The finance ministry disclosed that it extended 358.7 trillion won (US$259.6 billion) in loans to individual business owners between 2020 and 2023, with 154.7 trillion won (US$112.2 billion) still outstanding. Of the outstanding loans, 6.3 trillion won (US$4.6 billion) has been delinquent for three months or more. The ministry will release more detailed measures after consultations with relevant organizations.

Koo also announced that the government will unveil additional measures to support livelihoods in the coming week, ahead of the Chuseok holiday in September. These measures may include discount programs for agricultural products.