Government Launches Emergency Financial Support for Southern Flood Victims... Loan Maturity Extensions and Repayment Deferments

Detailed Financial Support Measures Announced for Flood-Affected Households and SMEs
Up to 100 Million Won in Emergency Living Stabilization Funds for Impacted Households
Financial Consultation Centers to Provide Rapid Counseling and Guidance on Support Measures

As heavy rains continue to cause widespread damage in southern regions such as Geoje in South Gyeongsang Province, financial authorities are launching emergency financial support for households, small business owners, and small and medium-sized enterprises affected by the flooding. Emergency living stabilization funds, loan maturity extensions, and repayment deferments will be provided to affected households. For affected businesses, emergency management stabilization funds and special guarantee programs will be made available.

On August 20, the Financial Services Commission announced that it has formed an 'Emergency Flood Disaster Financial Response Team' in cooperation with the Financial Supervisory Service, related financial institutions, and industry associations, and has devised these financial support measures.

The Ministry of the Interior and Safety raised the heavy rain crisis alert to the 'caution' level on August 16 and activated the first stage of the Central Disaster and Safety Countermeasures Headquarters, after intense rainfall began to intensify around southern areas such as Geoje in South Gyeongsang Province from August 15.

First, banks and mutual financial institutions will provide emergency living stabilization funds of between 20 million and up to 100 million won to customers affected by the flooding. In addition, commercial banks, savings banks, mutual finance institutions, insurance companies, and credit card companies will offer maturity extensions of three months to one year for loan principals, or defer repayments for affected households. Each company will determine the applicable period individually.

Credit card companies will also defer payment collection for affected customers for up to six months. Some credit card companies will introduce additional support measures, such as allowing installment payments after the deferment period, waivers of late fees, or postponement of debt collection on overdue amounts.

In the insurance sector, companies will expedite reviews and prioritize payment of insurance claims for affected clients, ensuring prompt payout of insurance proceeds. If a disaster damage certificate is issued, insurance companies may pay up to 50% of the estimated claim amount even before the damage investigation is complete. Premium payments will also be deferred for up to six months for affected policyholders.

If comprehensive auto insurance with own vehicle damage coverage is held, damages caused by vehicle submersion in parking lots or destruction by flooding will also be compensated.

Flood victims in specially designated disaster areas who face difficulty in debt repayment may apply for special debt adjustment programs offered by the Credit Counseling & Recovery Service. Unlike general debt adjustment, those who meet certain requirements may apply for expedited debt adjustment even before delinquency occurs, including up to one year of interest-free repayment deferment.

Small business owners and small and medium-sized enterprises affected by the flooding will receive emergency management stabilization funds. Policy financing institutions such as Korea Development Bank and Industrial Bank of Korea, along with commercial banks and mutual financial institutions, will support affected businesses with recovery funds and emergency operating funds. Industrial Bank of Korea will provide emergency operating funds of up to 300 million won per company.

Korea Credit Guarantee Fund will provide special guarantees up to 500 million won for affected SMEs and mid-sized companies, with guarantee coverage up to 90% and guarantee fee rates from 0.1% to 0.5%. The Agricultural, Fisheries and Livestock Credit Guarantee Fund will also increase its guarantee coverage for affected farmers and fishermen from 85% to 100%, and offer special guarantees up to 500 million won.

For existing loans, policy financing institutions, as well as commercial banks, savings banks, and mutual finance institutions, will offer loan maturity extensions and repayment deferments for up to one year. The Korea Credit Guarantee Fund and the Agricultural, Fisheries and Livestock Credit Guarantee Fund will also extend guarantee maturities on existing guarantee products by up to one year.

The Financial Services Commission and the Financial Supervisory Service plan to work with related financial institutions and industry associations to operate the Emergency Flood Disaster Financial Response Team, checking the status of the damage and progress of financial support. The Financial Supervisory Service will set up a consultation center to provide tailored counseling on loan execution, extensions, and premium payment deferments for disaster recovery and prioritize the handling of complaints. In particular, for severely affected regions, if necessary, financial counselors will be dispatched to the field to ensure rapid financial support is provided.

This content was produced with the assistance of AI translation services.