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Busan Metropolitan City to Provide KRW 1.2 Trillion in Financing at Interest Rates in the 1% Range through “MinSaeng 112” to Ease Small Business Financing Burdens

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Busan Metropolitan City, led by Mayor Chun Jae-soo, announced that it will sign a “Business Agreement on Low-Interest Loans in the 1% Range and High-Interest Loan Refinancing for Small Businesses Facing Management Difficulties” with major local financial institutions at 2:00 p.m. today, September 15, in the City Hall Video Conference Room to ease the financial burden on local small businesses.

The signing ceremony will be attended by Mayor Chun Jae-soo and senior representatives of major financial institutions, including Kim Sung-joo, President of Busan Bank; Lee Jae-heon, Deputy President of Hana Bank; Yoon Yong-hwan, Deputy President of KB Kookmin Bank; Yang Gun-gil, Deputy President of Shinhan Bank; Lim Dae-jin, General Manager of Woori Bank; and Jang Mi-im, Acting President of the Busan Credit Guarantee Foundation.

The agreement was prepared as part of an emergency livelihood stabilization measure to support local small businesses struggling with the prolonged domestic economic slowdown and the so-called “three highs” of high interest rates, high prices, and high exchange rates.

As high interest rates and inflation continue to dampen consumption, the number of bankruptcy and rehabilitation filings in Busan has risen sharply. In particular, Busan’s guarantee default rate and subrogation payment rate are higher than the national averages, while its default normalization and recovery rates are lower. The policy was therefore designed to establish a proactive financial safety net that reduces financing costs before local businesses fall into delinquency.

Based on this agreement, Busan Metropolitan City will launch “MinSaeng 112,” a comprehensive financial support project totaling KRW 1.2 trillion, the largest amount ever provided for a single policy financing product.

“MinSaeng 112” consists of five financial support packages designed to reduce the interest burden on small businesses, modernize accommodation facilities, and build a foundation for the growth of entrepreneurial small businesses.

The “Livelihood Security Agreement Guarantee” will provide new working capital at low interest rates, while the “Conversion Guarantee” and “High-Interest Loan Refinancing” programs will ease the financial burden on borrowers currently using high-interest loans. The “Aging Accommodation Facility Modernization Fund” will provide financing for facility improvements and other upgrades to aging accommodation facilities to promote longer-stay tourism in Busan. The “Entrepreneurial Small Business” program will provide interest subsidies to businesses with growth potential and innovative capabilities that meet the criteria for small businesses.

The detailed support amounts are KRW 500 billion for the Livelihood Security Agreement Guarantee, KRW 200 billion for the Conversion Guarantee, KRW 300 billion for High-Interest Loan Refinancing, KRW 100 billion for Aging Accommodation Facility Modernization, and KRW 100 billion for Entrepreneurial Small Businesses, for a total of KRW 1.2 trillion. More than 40,000 small business owners in Busan are expected to benefit.

To substantially reduce the financial burden on small businesses, Busan Metropolitan City will provide interest subsidies of 4.0 percentage points for the first year and 2.0 percentage points thereafter, enabling borrowers to access financing at effective interest rates in the 1% range.

The City expects the policy financing to generate more than KRW 1.5 trillion in induced production and create approximately 16,000 jobs in the Busan area. It also anticipates that the direct injection of funds into neighborhood commercial districts and small business establishments will help revitalize the local economy.

Detailed information on the policy financing program will be available from tomorrow, September 16, on the Busan Metropolitan City website at https://www.busan.go.kr under Busan News, Notices, and Public Announcements by searching for “Revised SME Financing Support Plan.”

Applications will open on September 17. To prevent a concentration of loan screening applications before the Chuseok holiday, the High-Interest Loan Refinancing program and the Aging Accommodation Facility Modernization Fund are scheduled to begin on September 28, after the holiday.

Mayor Chun Jae-soo said, “Amid the combined pressures of high interest rates and sluggish domestic demand, what small businesses need most urgently is a practical safety net that reduces their financial burden and enables them to continue operating their businesses with stability.”

He added, “I hope the MinSaeng 112 financial support program will ease the strain on small business owners and serve as a strong stepping stone toward business recovery and renewed growth.”