Jeju to Provide 15 Billion Won in Guarantees for 500 Small Businesses; Community Credit Cooperatives to Contribute 1 Billion Won

[Financial News, Jeju—Jeong Yong-bok] A special guarantee program worth 15 billion won will be provided to about 500 small businesses in Jeju facing financial difficulties ahead of Chuseok. The Korea Federation of Community Credit Cooperatives will contribute 1 billion won, and the Jeju Credit Guarantee Foundation will provide guarantees worth up to 15 times that contribution, lowering the lending barrier for small businesses with insufficient collateral.
According to Jeju Special Self-Governing Province on the 17th, Wi Seong-gon, governor of Jeju Special Self-Governing Province, Kim In, chairman of the Korea Federation of Community Credit Cooperatives, and Oh Gwang-seok, chairman of the Jeju Credit Guarantee Foundation, signed an agreement that day at the federation's headquarters in Seoul for the Jeju Small Business Hope Transition Special Guarantee.
Under the program, the Korea Federation of Community Credit Cooperatives will make a special contribution of 1 billion won, which the Jeju Credit Guarantee Foundation will use to provide 15 billion won in credit guarantees. Once a small business receives a guarantee certificate from the foundation, a community credit cooperative will issue the actual loan.
The 15 billion won will not be distributed to small businesses as cash. Instead, the Jeju Credit Guarantee Foundation will guarantee a certain portion of the obligations of businesses that lack sufficient collateral to obtain loans from financial institutions. The institutions will then lend the funds based on those guarantees.
Eligible applicants include small businesses in Jeju facing financial difficulties and companies that practice environmental, social and governance (ESG) management. Each business can receive guarantees of up to 70 million won.
The program will also reduce financing costs. A fixed annual guarantee fee of 0.9% will apply, 0.3 percentage points below the basic rate. The guarantee fee is charged by the credit guarantee foundation for using its guarantee, separately from the interest on a bank loan.
Jeju Special Self-Governing Province will link the program to its small and medium-sized business development funds and cover 2.5% of loan interest. This means the local government will subsidize part of the financing costs that small businesses would otherwise have to bear.

The guarantee screening criteria will also be eased. The measure is intended to reduce the number of financially vulnerable small businesses excluded from support under the existing screening standards.
Applications and screening can be completed remotely. Through the Jeju Credit Guarantee Foundation's Bojeung Dream application, applicants can apply for a guarantee without visiting the foundation in person.
The program begins today and will continue until the 15 billion won guarantee fund is exhausted. It is part of Jeju Special Self-Governing Province's broader measures to support the local economy ahead of Chuseok and encourage increased consumption in the fall.
Jeju Special Self-Governing Province also decided to provide an additional 30 billion won in September, on top of its existing 84.5 billion won in guarantees for small businesses. The additional funds consist of 15 billion won in special guarantees for stabilizing people's livelihoods, backed by special contributions from commercial banks, and 15 billion won in the Hope Transition Special Guarantee, backed by a contribution from the Korea Federation of Community Credit Cooperatives.
In August, Jeju Special Self-Governing Province also launched a separate special guarantee program worth 30 billion won in partnership with KakaoBank and the Jeju Credit Guarantee Foundation for small businesses in 24 distressed sectors, including retail, wholesale and lodging. Jeju Special Self-Governing Province is expanding financial support for small businesses by tailoring guarantee products to economic conditions and the circumstances of individual sectors.
The agreement also links financial assistance with business support. The Jeju Credit Guarantee Foundation will provide education and counseling alongside its guarantees, while Jeju Special Self-Governing Province will identify eligible businesses and promote the program.
Wi Seong-gon, governor of Jeju Special Self-Governing Province, said, "This agreement has given many small business owners great hope." He added, "We will continue working with the Korea Federation of Community Credit Cooperatives to develop local communities and help small business owners regain their strength."


[email protected] Jeong Yong-bok Reporter