Credits meant for small-business bills drained by mobile game purchases — ministry says it can't recover the money

Government credits intended to ease utility costs for small-business owners were used for mobile game purchases and other expenses unrelated to business operations, a new parliamentary review has found. The problem stemmed from a decision to add telecommunications bills as an eligible expense, which inadvertently opened a loophole for mobile micropayments. The Ministry of SMEs and Startups said recovering the misused funds is not feasible, citing personal data protection constraints. Of recipients suspected of misusing credits on phone games and similar purchases, only 0.6 percent voluntarily returned the telecom portion.

A fiscal year 2025 settlement analysis report recently published by the National Assembly Budget Office found that the Ministry of SMEs and Startups' small-business burden-relief credit program followed a chain of failures: poor demand forecasting led to an inflated budget, which prompted an expansion of eligible uses to exhaust the funds, which in turn enabled misuse including mobile game purchases, before the eligible categories were eventually scaled back.

The small-business burden-relief credit program was a temporary initiative created under the first supplementary budget of June 2025 to ease the strain of high inflation and high interest rates. It provided 500,000 won ($340) in credit- and debit-card credits to small-business owners with annual sales of 300 million won or less. The Ministry of SMEs and Startups allocated 1.57 trillion won for the program, and about 3.06 million businesses were selected as eligible recipients.

The controversy began with the expansion of eligible spending categories. When the program launched, credits could only be used for utility bills and the four major social insurance premiums. In August last year, however, the ministry issued a second public notice adding telecommunications bills and vehicle fuel costs to the list. The budget office said the ministry appeared to have concluded that spending on utilities and insurance premiums alone would not exhaust the full budget, given the scale of telecom and fuel expenditures that followed. Telecom spending ultimately reached 184.9 billion won, accounting for 12.4 percent of total credit use, while fuel costs reached 527.7 billion won, or 35.3 percent.

The problem was that telecommunications bills include mobile micropayments — among them charges for mobile games — creating an opening for credits to be spent on purchases with no connection to business operations. The issue was raised at a National Assembly national audit on Oct. 23 last year. In November 2025, the ministry sent text messages to about 2.98 million credit recipients asking them to voluntarily cancel any transactions suspected of falling outside the program's intended purpose. Actual voluntary cancellations amounted to only 1.12 billion won across 19,395 cases — just 0.6 percent of total telecom spending under the program.

The ministry said recovering funds spent on game purchases and similar uses is not possible. A ministry official said there had been no way to block small-business owners from using telecom credits for game payments in advance. "We consulted with the three major carriers, but it is difficult to distinguish which payments were business-related and which were for games," the official said. "The carriers also said they could not sort them out because of personal data protection rules." The official added that recipients had been notified to voluntarily cancel improper charges, and that some telecom credits were returned as a result.

Asked about the budget office's finding that demand had been poorly forecast, the ministry said the program reflected feedback from the field. The official said many small-business owners in delivery and transport relied heavily on fuel, while others operated in telecommunications sales — which was why fuel and telecom costs were added as eligible categories. The Ministry of SMEs and Startups has since removed telecommunications bills from the list of eligible expenses in this year's follow-on program, the small-business management stabilization voucher.

The demand forecast also fell short. The ministry had originally expected to exhaust the budget by the end of 2025 but extended the spending deadline to Jan. 31 this year after failing to do so. Even then, actual spending reached only 1.49 trillion won — 97.3 percent of the 1.53 trillion won in credits that had been approved.

The budget office said the shortfalls were "the result of designing the program without closely examining actual demand from small-business owners beforehand," and called on the ministry to strengthen upfront planning for new programs to prevent repeated overestimation and unintended side effects.