Seoul's Gangdong-gu announced Monday that it signed a "community co-prosperity special credit guarantee agreement" with Ikea Korea, Woori Bank and KB Kookmin Bank on Thursday, expanding its special credit guarantee limit by 10 billion won ($6.81 million) amid a prolonged period of high inflation, high interest rates and a high exchange rate.
The agreement — the second such partnership pursued this year — saw the three institutions contribute a combined 800 million won to the Seoul Credit Guarantee Foundation, raising the district's special credit guarantee ceiling from 59.73 billion won to 69.73 billion won.
Ikea Korea became the first private company to join Gangdong-gu's special credit guarantee program. During the process of bringing Ikea Korea on board, the district also explained the program's purpose to local financial institutions and invited their participation, prompting Woori Bank and KB Kookmin Bank to contribute as well.
The special credit guarantee loan support program helps small businesses and self-employed merchants in the district — those who lack sufficient collateral — secure bank loans through credit guarantee certificates, and is funded by contributions made to the Seoul Credit Guarantee Foundation.
Small businesses and sole proprietors registered in Gangdong-gu for at least three months are eligible to apply. However, businesses that have received credit guarantee support within the past year are excluded. Guarantees of up to 70 million won per business are available, subject to a screening review.
Those who have contributed to district administration or the local community, merchants in traditional markets and alley-style shopping districts, and subsistence self-employed workers can receive up to 100 million won through the district's preferential recommendation system, also subject to review. Repayment terms extend up to five years, including options such as a one-year grace period followed by four years of installment payments. Borrowers who use Seoul Metropolitan Government cooperative bank funds can access financing at approximately 2.7 percent per year (variable rate, as of July 16), and prepayment penalties are waived, further easing the repayment burden.
In the first half of this year alone, the district provided credit guarantees totaling 36.29 billion won to 1,041 businesses and offered business management and guarantee consulting services to 463 small business owners at on-site reception centers. That already surpasses last year's full-year figures of 872 businesses and 30.63 billion won, while the number of people using the on-site reception centers more than doubled from 220 last year to 463.
"I am grateful to the private company and financial institutions that joined us in contributing for the sake of community co-prosperity," Gangdong-gu District Mayor Lee Su-hee said. "I hope the funds secured through this agreement will help stabilize the operations of small businesses and self-employed merchants."
Lee added that the district would continue to expand cooperative partnerships with the private sector and financial institutions and pursue effective livelihood support policies going forward.
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