The Korea Federation of SMEs (KBIZ) has joined hands with Industrial Bank of Korea (024110) to promote the country's mutual aid fund for small and medium-sized enterprises.
KBIZ said on the 6th that it is launching a joint program with IBK to expand use of the SME Mutual Aid Fund, aimed at strengthening the financial stability of small business owners.
The partnership will use IBK's sales network to introduce the fund to a wider pool of companies. The SME Mutual Aid Fund is the only savings-based lending and mutual aid program in South Korea reserved exclusively for smaller firms, allowing members to borrow up to three times their accumulated contributions without a guarantor or collateral. The ceiling rises to 10 times the balance for borrowers who pledge real estate as collateral. Interest-rate subsidies from local governments nationwide can further ease financing costs, and members who have paid into the Noranusan Mutual Aid scheme, a separate savings program for small business owners, for at least three years qualify for preferential loan terms.
KBIZ plans to publicize the fund not only at IBK branches nationwide but also through online channels, including the IBK BOX mobile app. Through the end of November, it will also run a promotion offering Naver Pay gift certificates to customers who sign up online through QR codes on tablets and leaflets placed at branches across the country.
Interest among smaller firms has risen steadily as high borrowing costs persist. Loans extended through the fund totaled 644.2 billion won from January through September this year, up 12% from 574.6 billion won a year earlier. New enrollments over the same period came to 3,481 companies, a 37% increase from 2,545 a year earlier.
"Working with IBK gives us a chance to introduce the fund to many more small and medium-sized enterprises and small business owners," said Lee Chang-ho, head of KBIZ's mutual aid business division. "We will continue to improve access to the fund through partnerships with a range of institutions, so that smaller companies can prepare for downturns and receive practical financial support."
Details on enrollment and borrowing are available on the fund's website, its mobile app and by phone through its call center.
