7 in 10 SMEs say business conditions unimproved in H2

By Nam Hyun-woo

More than 70 percent of small and medium-sized enterprises (SMEs) here said their business conditions in the second half did not improve from six months earlier, according to survey results released Monday.

The poll, conducted by the Korea Federation of SMEs, showed that 36.9 percent of 273 SMEs responding said their business dropped slightly in the second half, while 7.7 percent replied their condition seriously deteriorated and 28.8 percent reported no change.

Only 26.6 percent said the condition of their businesses improved slightly or greatly in the second half of the year.

In a previous survey conducted in April and May, 47.5 percent of respondents said their business conditions didn’t improve from a year earlier, but the new poll shows their views about their businesses became more pessimistic.

Most respondents attributed their skeptical views to the prolonged slump in domestic demand. In a similar poll in the first half, 61.9 percent attributed the sluggish demand to worsened business conditions, but the latest finding showed that 70.8 percent said so.

In the survey, 81.7 percent said they anticipate the gloomy conditions will likely continue for more than two years, signaling that their suffering may not be addressed in the short term.

The SMEs also said they are concerned over the continued decline in sales, lack of growth and high turnover rates.

Also, they replied that getting loans from financial institutions became much more difficult. More than 42 percent of the SMEs said they felt financial institutions became “stricter” in extending loans to them, while those who said lenders became more “flexible” accounted for 3.9 percent. In the previous poll, 40.2 percent said they were having more difficulty obtaining loans, while 9.2 percent said they felt it was easier.

“When the federation’s staff visited SMEs, we could feel SMEs were going through really hard times,” an official at the federation said. “With uncertainties growing within and outside of the country, the government and the politicians should join hands to come up with measures to help SMEs overcome these hardships.”

The poll was taken from Sept. 26 to Nov. 4.