 |
| Financial Services Commission (FSC) Secretary General Lee Se-hoon speaks during a press briefing at the government complex in Seoul, Tuesday. Courtesy of FSC |
By Anna J. Park
Massive amounts of special loans and benefits granted to small and medium-sized enterprises (SMEs) and mom-and-pop businesses during the COVID-19 crisis are on a stable path to repayment, according to the top financial regulator.
The Financial Services Commission (FSC) Secretary General Lee Se-hoon said during a press briefing on Tuesday that both the number of beneficiaries and the loan balances have been on a gradual decrease, indicating a stable soft landing of the debt crisis incurred from the pandemic.
"The aggregated amount of the pandemic-induced financial support has decreased to 76.2 trillion won ($57 billion) at the end of June, from about 100.1 trillion won at the end of September last year. The number of beneficiaries granted the support also fell to 351,000 individuals in June, from 434,000 people at the end of last September," FSC Secretary General Lee said, explaining the loan balances and the number of borrowers each decreased by 24 percent and 20 percent respectively, signifying a "soft landing."
Since April 2020, the financial authorities and the financial sector have cooperated in implementing loan maturity extensions and repayment deferrals for SMEs facing liquidity crises during the pandemic. The measures have been extended every six months since then.
Regarding whether the special support measures' slated to come to an end in September would pose a threat to the economy, the FSC clarified that 93 percent of the remaining loan balances ― 71 trillion won out of the current 76.2 trillion won ― may be extended by two more years to September 2025.
Also, the FSC explained that as of the end of June, 98 percent of borrowers of the special loans, who were granted delay of payment, have arranged to pay back the loans in installments over a maximum of 60 months until fall of 2028.
"In the loan maturity extension programs, the majority of borrowers have completed repayment through regular repayments or refinancing loans," the FSC highlighted, adding that borrowers under repayment deferral programs also mostly completed repayments, as their financial situations improved.
Yet, the financial regulator said a total of 1.05 trillion won, or 0.07 percent of the entire loans made to SMEs and small business owners by the financial industry, is estimated to be facing a higher possibility of delinquency. In countering such cases, the FSC plans to support debtors in fulfilling their obligations by closely cooperating with the financial sector in granting them various support programs, one-on-one management advice and access to debt restructuring systems.
![[INTERVIEW] Ecolab helps Korean partners profit from ESG management](https://img.koreatimes.co.kr/upload/thumbnailV2/7a924189dbb7426ab12275ba98702309.jpg/dims/resize/178/optimize)
![[INTERVIEW] 'Lifeline for migrant workers in Korea' - Rev. Kim fights for foreign employees' rights](https://img.koreatimes.co.kr/upload/thumbnailV2/8fb4b5d381da49df90276394550f2889.jpg/dims/resize/178/optimize)
![[INTERVIEW] Korea to work with US, Japan to fight climate change](https://img.koreatimes.co.kr/upload/thumbnailV2/800d9054a14b4a0f9cc576366cc1b914.jpg/dims/resize/178/optimize)
![[ANALYSIS] Has N. Korean leader's daughter been confirmed as heir apparent?](https://img.koreatimes.co.kr/upload/thumbnailV2/e65868a1b5834cc3aef853378637d1fd.jpg/dims/resize/178/optimize)
![[INTERVIEW] Hip-hop group Uptown returns after 13 years with new lineup](https://img.koreatimes.co.kr/upload/thumbnailV2/0eae35da5e9c40c38cf439e550a2eb3e.jpg/dims/resize/178/optimize)
![[INTERVIEW] ASTRO members aim to shine in musical theater](https://img.koreatimes.co.kr/upload/thumbnailV2/df16760dc50f469d93434f66a069465c.jpg/dims/resize/178/optimize)
