Gangdong-gu expands special credit guarantee limit by W10b

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 the district's special credit guarantee ceiling by 10 billion won ($6.82 million).

The agreement comes amid a prolonged period of high prices, high interest rates and a high exchange rate — a combination widely referred to as the "triple high" — and is expected to ease financial pressure on small businesses and self-employed merchants in the district.

The three institutions contributed a combined 800 million won to the Seoul Credit Guarantee Foundation, raising the special credit guarantee ceiling from 59.73 billion won to 69.73 billion won.

The special credit guarantee loan program helps small businesses and self-employed merchants in the district that lack sufficient collateral secure loans from commercial banks through credit guarantee certificates.

Small businesses and self-employed merchants registered in Gangdong-gu for at least three months are eligible to apply. Businesses that received credit guarantee support within the past year are excluded.

Each business can receive up to 70 million won in credit guarantees. Those who have contributed to district administration or the local community, merchants in traditional markets and alley-type shopping districts, and subsistence-level self-employed individuals can receive up to 100 million won through the district's preferential recommendation system.

The repayment period is up to five years, with options such as a one-year grace period followed by four years of installment payments. Borrowers using Seoul Metropolitan Government cooperative funds from commercial banks can access financing at an annual interest rate of approximately 2.7 percent (variable rate, as of July 16). Early repayment fees are waived.

In the first half of this year, Gangdong-gu extended credit guarantees totaling 36.29 billion won to 1,041 businesses — surpassing last year's full-year figure of 30.63 billion won extended to 872 businesses.

"I am grateful to the private companies and financial institutions that joined us in contributing funds for community co-prosperity," district mayor Lee Su-hee said. "I hope the resources secured through this agreement will help stabilize the operations of small businesses and self-employed merchants."