The Korea Federation of Small and Medium Enterprises said on the 3rd that it will provide funds to small and medium enterprises that have weak access to finance through the Small and Medium Enterprises Mutual Aid Fund.
The Small and Medium Enterprises Mutual Aid Fund, operating since 1984, is a system that provides loans utilizing credit for overdue sales receivables, bills, checks, and operating funds based on funds created from contributions made by small and medium enterprises and grants from the government.
Depending on the balance of contributions and credit ratings, borrowers can receive credit loans at an average annual interest rate of 6% for up to three times the balance of contributions. If the loan limit is insufficient, real estate collateral loans (including subordinate collateral) can also be obtained at an interest rate of 4.5% for up to ten times the balance of contributions. Considering that local governments support 1-2% of the loan interest rate, the actual interest burden decreases further.
KBIZ plans to effectively guide small and medium enterprises and small business owners on the mutual aid fund system and support membership and loan counseling in cooperation with 884 small and medium enterprise cooperatives nationwide.
As of the end of last month, more than 30 industry-specific cooperatives and associations related to small and medium enterprises have signed mutual aid agency agreements and are guiding their members on the utilization of the mutual aid fund.