Seoul [South Korea], September 6 : The South Korean government has announced a 10 trillion won (USD 7.18 billion) low-interest financing plan aimed at supporting small business owners with strong repayment records, in a move to ease financial burdens and encourage growth in the sector.
Pulse, the English service of Maeil Business Newspaper Korea, reported that the plan was unveiled during a meeting hosted by the Financial Services Commission (FSC) at the Korea Federation of Micro Enterprises (KFME) in Yeouido, Seoul.
The support package includes 4.5 trillion won to help businesses facing operational difficulties.
3.5 trillion won to promote small-business growth, 2 trillion won for startup facility investments.
Borrowers with a faithful loan repayment history will benefit from increased interest rate reductions, which will rise from the current 1.3 percentage points to 1.5-1.8 percentage points.
Additionally, guarantee-fee reductions will be expanded by 0.2 to 0.5 percentage points, reducing borrowing costs even further, the news platform added.
The report added that the South Korean government will also raise the average loan limit for small business owners by 67 per cent. Notably, the loan ceiling for COVID-19-related support funds will be increased from 60 million won to 100 million won.
Pulse further added in the report that the commercial banks are joining the initiative. The FSC and South Korea's five largest commercial banks have agreed to expand their small business lending from 76.4 trillion won in 2025 to 80.5 trillion won in 2026. A total of 85.1 trillion won in funding will be concentrated between late 2025 and early 2026 to help struggling business owners navigate ongoing economic challenges.
The plan reflects the government's ongoing efforts to provide targeted support for micro and small enterprises, which play a vital role in South Korea's economic resilience and employment.
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