Small Enterprise and Market Service Selects Credit Unions as New Providers for Small Business Refinancing Loan Program

Strengthening Financial Access for Small Businesses in Non-Metropolitan Areas
Expansion of Participating Financial Institutions

The Small Enterprise and Market Service announced on September 17 that it has selected credit unions as the new financial institutions to handle the 'Small Business Refinancing Loan' program, which aims to ease the financial burden on small business owners.

The 'Small Business Refinancing Loan' is funding support designed to help small business owners with weak financial soundness, specifically those with mid- to low-credit ratings, by alleviating their high-interest debt repayment burden and lowering their overall financing costs. In particular, the program converts high-interest loans—those at annual interest rates of 7% or higher—or maturity extension loans from banks that have become problematic for mid- to low-credit small businesses, into long-term installment loans with a fixed annual interest rate of 4.5% over a ten-year repayment period. This conversion is the core feature of the program.

Small Enterprise and Market Service

Earlier, the Small Enterprise and Market Service issued a call for additional participating institutions to strengthen support for small businesses located in non-metropolitan areas. Following the review, credit unions were selected as the first among mutual finance institutions. Credit unions operate a vast network of over 1,600 branches, particularly in neighborhoods densely populated by small businesses such as traditional markets and shopping districts, and are therefore expected to improve accessibility to policy-based funding.

Credit unions plan to officially launch the refinancing loans in mid-November, once all necessary preparations such as establishing appropriate infrastructure are complete. As a result, the number of financial institutions handling the refinancing loan will increase from eleven—currently including Jeonbuk Bank and IBK—to twelve, with credit unions added to the list.

In Tae-yeon, Chairman of the Small Enterprise and Market Service, said, "We expect that credit unions' regionally embedded infrastructure will allow more mid- to low-credit small business owners to reduce their financial burdens and run their businesses more stably. We hope for strong interest and applications from small business owners who are struggling due to high interest rates."

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