Busan Credit Guarantee Foundation: “Livelihood Security Agreement Guarantee” tops 100 billion won in a month

[Financial News] The cumulative amount supported through the “Livelihood Security Agreement Guarantee,” which the Busan Credit Guarantee Foundation is implementing with the Busan city government, has exceeded 100 billion won just over a month after the program began, drawing a positive response. Analysts say a key factor was providing practical financial support in the form of low-interest loans with rates in the 1% range to small businesses in Busan struggling to secure funds amid difficult economic conditions.
According to the Busan Credit Guarantee Foundation on the 23rd, the cumulative amount supported through the Livelihood Security Agreement Guarantee, which began accepting applications on the 17th of last month, stood at 107.9 billion won as of the 21st, with 4,124 businesses receiving support.
Among the businesses receiving support, 32% were small businesses with medium or low credit and NICE personal credit scores of 879 or below, suggesting the program helped address financial blind spots for groups facing high barriers to accessing financial services.
The guarantee was launched as part of “100-Day Emergency Measures for Livelihood Recovery,” Busan Mayor Chun Jae-soo’s No. 1 pledge, to coincide with the launch of the ninth popularly elected administration.
The city subsidizes 4 percentage points of loan interest during the first year and 2 percentage points over the following four years, allowing small businesses to access funds at an effective rate in the 1% range in the first year. The program provides up to 30 million won per business. Borrowers can choose between equal installments over five years or four years of installment payments after a one-year grace period.
There are two types of support: a “new guarantee” for businesses receiving new working capital and a “conversion guarantee” that allows them to refinance existing loans backed by the foundation at a lower rate. Applications can be made through the foundation’s guarantee-support app, Bogeung Dream, at its branches, or at branches of Busan Bank, KB Kookmin Bank, Hana Bank, Shinhan Bank and Woori Bank.
Foundation Chairman Kim Hyun-jun said, “Demand surged in the early days of the program, which offers ultra-low-interest support with effective rates in the 1% range, and some of the foundation’s branches even became overloaded. But things are now stabilizing. We will continue to expand tailored guarantee support that reflects needs on the ground so that funding can be provided quickly to local small businesses struggling with high interest rates and prices.”
[email protected] Kwon Byeong-seok Reporter