The Korea Federation of Small and Medium Enterprises will lower the loan interest rate of the Small and Medium Enterprise Mutual Fund starting from next month on the 1st.
According to KBIZ on the 30th, this interest rate adjustment is a measure to alleviate the financial burden on small and medium-sized enterprises and small business owners and improve the conditions for financial utilization in response to recent changes in financial conditions such as economic slowdown and contraction of the money market. The loan interest rate for the Small and Medium Enterprise Mutual Fund will be reduced by up to 0.3%.
The interest rates for short-term operating fund loans will drop to 4.00% to 8.69%, bills and check loans will fall to 4.00% to 7.42%, while real estate mortgage loans will be lowered to 4.25%. For small business owners facing difficulties due to sluggish domestic demand, the small business yellow umbrella-linked loan will be implemented at a reduced rate of 5.2%, down by 0.3%.
The maturity interest rate for contributions (3-5 years) will be adjusted down by 0.25%, from 3.25% to 3.0%, in line with the Bank of Korea's base rate and the decline in market interest rates.
The Small and Medium Enterprise Mutual Fund is a system introduced in 1984 under the 'Act on the Cooperative of Small and Medium Enterprises.' The fund, created from contributions made by small and medium-sized enterprises and contributions from the government, can be used for various purposes such as loans for bad debt and receivables, bills and check loans, and operating fund loans.
Participants can utilize credit loans up to three times their contribution balance based on their credit rating. If the loan limit is insufficient, it is also possible to use real estate mortgage loans up to ten times. Small business owners who have been subscribers to the yellow umbrella mutual fund for more than three years can also receive support for small business yellow umbrella-linked loans up to ten times their contribution balance (with a limit of 20 million won) after joining the mutual fund.
Currently, about 17,000 small and medium-sized enterprises and small business owners nationwide have participated, and in just the last year, approximately 690 billion won in loans were supported.
Detailed information on joining the mutual fund and loans can be checked through the KBIZ customer center, website, or mobile application (app).