About 103 trillion won will be made available to small business owners and small and medium-sized enterprises ahead of the Chuseok holiday. Loan repayment dates and credit card payment dates falling during the holiday will be pushed back to after the break without late interest or late fees.
The Financial Services Commission said on the 13th that policy finance institutions and all financial sectors will supply a combined 102.6 trillion won to vulnerable segments including small business owners and small and medium-sized enterprises for Chuseok. Policy finance institutions will run special lending and guarantee programs from Aug. 24 through Oct. 12, providing a total of 23 trillion won. Banks will supply 79.6 trillion won through new loans and maturity extensions.
Policy finance institutions will pair new funding with extensions of existing loan maturities. Korea Development Bank will provide a total of 3.7 trillion won, including 2.2 trillion won in new loans and 1.5 trillion won in maturity extensions. It will also offer interest rate cuts of up to 0.4 percentage point. Industrial Bank of Korea will supply a total of 9.2 trillion won, including 3.7 trillion won in new loans and 5.5 trillion won in maturity extensions. Korea Credit Guarantee Fund will provide a total of 10.1 trillion won, combining 2.1 trillion won in new guarantees with 8 trillion won in maturity extensions. Special and preferential guarantee programs will feature simplified review procedures and favorable terms on guarantee fees, guarantee ratios and guarantee limits.
Banks will also supply a total of 79.6 trillion won to small business owners and small and medium-sized enterprises, including 32.2 trillion won in new loans and 47.4 trillion won in maturity extensions. Preferential interest rates will apply based on factors such as transaction history and credit ratings. The four major commercial banks will run their programs from Aug. 24 through Oct. 16, with some variation by bank.
Separate holiday funding was also prepared for traditional market merchants. The Korea Inclusive Finance Agency will supply a total of 5 billion won through merchant associations so vendors can raise money for purchases such as holiday goods. Traditional market merchants can take out small loans of up to 10 million won at interest rates of up to 4.5% annually through the 23rd.
Loan repayment dates and various payment dates that overlap with the holiday will be pushed back. Loans from banks, insurers, savings banks and credit card companies maturing during the Chuseok holiday from the 24th to the 27th will be automatically extended to the 28th without late interest. Credit card payment dates overlapping with the holiday will likewise be deferred to the 28th without late fees. Automatic payment dates for insurance premiums, telecommunications bills and utility charges will also be adjusted to after the holiday.
Some financial products will be paid out earlier. Korea Housing Finance Corporation will pay reverse mortgage benefits in advance on the 23rd to customers whose payment dates fall during the Chuseok holiday. In addition, all financial companies will pay deposits maturing during the holiday on the 28th, with interest accrued during the holiday period reflected. Depending on the product, customers who request it can also receive payment on the 23rd.
Securities settlement schedules will also be adjusted. Because proceeds from stock sales are paid two business days after the trade date, investors who sell shares on the 23rd will receive their money on the 29th, after the holiday ends.
Service channels will also operate to handle urgent financial needs during the holiday. Twelve banks will run 11 mobile branches at locations such as highway rest areas, where customers can make deposits and withdrawals and exchange bills for new notes. Eleven flexible-hours branches handling currency exchange and remittances will be set up at airports and in areas with large numbers of foreign workers.
An FSC official urged caution, saying, "Before and after the Chuseok holiday, people need to watch out for text message scams that impersonate holiday gift delivery services or public agencies, such as notices of fines for traffic violations."
