“Don’t even know basic statistics”: Heads of agencies under the SMEs Ministry rebuked over “inadequate screening”

[Financial News] At a parliamentary audit on the 15th of agencies under the Ministry of SMEs and Startups, the National Assembly’s Trade, Industry, Energy, SMEs and Startups Committee heard allegations that Public Home Shopping had failed to address broadcast scheduling that favored certain companies. In Tae-yeon, chairman of the Small Enterprise and Market Service, replied that further interest-rate cuts were under discussion for emergency funds provided to businesses operating inside Homeplus stores. Lawmakers sharply rebuked agency heads for being ill-prepared, saying they did not even know basic statistics.
At the audit, Public Home Shopping’s allocation of golden-time broadcast slots came under scrutiny. According to the office of independent lawmaker Kim Jong-min, A Co. and H Co., which share the same representative, person in charge and brand, allocated 52.4% and 80.4%, respectively, of their total airtime to golden-time slots. By contrast, as many as 174 companies were never scheduled during golden time.
Criticism was also raised that the Small Enterprise and Market Service’s loan assessments were inadequate, given the many cases of businesses closing soon after receiving direct loans. According to Democratic Party lawmaker Heo Seong-mu, from 2021 to 2025, there were 6,732 cases of businesses closing within a year of receiving direct loans, involving a total of 398.9 billion won in loans. Of these, 2,910 cases involved closures within a month, involving 60.9 billion won.
Chairman In said, “We plan to introduce a credit assessment tailored to small business owners that evaluates sales, industry, commercial district, capabilities and growth potential together,” adding, “We are strengthening our artificial intelligence (AI) system.”
Deficiencies in the oversight systems of the Korea Technology Finance Corporation, Korea Venture Investment Corp. and the Korea SMEs and Startups Agency were also pointed out.
According to People Power Party lawmaker Choi Su-jin, the Korea Technology Finance Corporation’s subrogation payments totaled 1.5 trillion won last year. From 2020 through August this year, 227 companies closed or sold their controlling stakes within a year of receiving guarantees. Of the 31.4 billion won lent, only 840 million won was recovered.
Korea Technology Finance Corporation Chairman Kwon Hyeong-taek replied, “To prevent this from happening again, we will strengthen direct interviews with business owners and investigations during guarantee reviews, and more rigorously monitor compliance with responsible management agreements afterward to prevent financial failures.”
Korea Venture Investment came under scrutiny after failing for four and a half years to discover that a key employee of a fund manager selected for a 2021 Korea Fund of Funds investment program had left just six months after the selection.
Some agency heads were rebuked by lawmakers for being unable to provide basic figures, including the size of major budgets.
Asked about the budget for technology assessments, a core function of the Korea Technology Finance Corporation, Chairman Kwon was unable to provide a specific figure. Chairman In also could not give a specific amount for the scale of participation in the New Start Fund.
Committee Chairman Kim Seong-won took issue with their lack of preparation and rebuked them, saying they needed to prepare more thoroughly.
Chairman In also said that further interest-rate cuts were under discussion for emergency funds provided to businesses operating inside Homeplus stores.
The Ministry of SMEs and Startups cut loan interest rates starting in July in response to criticism that policy funds were underused. For July to September, the Korea SMEs and Startups Agency’s rate was 3.28%, and the Small Enterprise and Market Service’s rate was 3.35%. However, calls are growing to increase support for companies affected by Homeplus, given that the emergency management stabilization fund applied to small and medium-sized businesses affected by the 2024 TMON–WeMakePrice (TMEP) crisis carried a fixed annual interest rate of 2.5%.

[email protected] Kim Hyeon-cheol Reporter