Gwangju Bank's S.O.S. Project boosts small-business sales by up to 19%

Gwangju Bank's joint initiative with the South Jeolla Credit Guarantee Foundation to help struggling small businesses recover has lifted average sales at supported firms by 17 to 19 percent, the bank said Tuesday.

The results were recorded under the S.O.S. (Save Our Small Business) Project, which the two institutions are running together to support business recovery and revenue growth among small business owners in the region.

The S.O.S. Project identifies small businesses in South Jeolla Province that are struggling amid high interest rates and an economic downturn but cannot access conventional financial institutions. It then provides tailored recovery support — including financing, management consulting and debt restructuring — with the goal of helping them return to normal financial transactions and business operations.

In March, Gwangju Bank signed an MOU with the South Jeolla Credit Guarantee Foundation and established a two-track support system: a "management improvement support" track to help businesses showing signs of financial distress stabilize their operations, and a "recovery support guarantee" track for businesses already in arrears but with the will and potential to bounce back. The bank plans to channel a total of 5 billion won ($3.53 million) through the project.

As of the end of July, the project had extended guarantees on 69 cases totaling 1.55 billion won. The management improvement support track accounted for 41 cases worth 1.1 billion won, while the recovery support guarantee track covered 28 cases worth 455 million won.

The support has produced tangible results. A review of 10 businesses that had received guarantees at least two months earlier found all of them still operating, with eight reporting higher sales than before the guarantee was issued. Among management improvement support recipients that saw sales grow, the average increase was 18.9 percent; for recovery support guarantee recipients, it was 17.3 percent.

Gwangju Bank's Inclusive Finance Center provides financial counseling to businesses that cannot access mainstream lenders due to credit downgrades, overdue payments or multiple debts, and connects them with funding based on their business commitment and recovery potential.

For businesses eligible for debt reduction, the center guides them through the relevant procedures and links them with local government interest-subsidy programs, bringing the average effective interest rate on supported loans down to around 2 percent and easing the overall financial burden.

"The S.O.S. Project is a meaningful example of inclusive finance where the MOU between our two institutions went beyond a symbolic declaration and translated into real funding and genuine opportunities for small businesses to get back on their feet," bank president Jeong Il-seon said. "We will continue to work closely with the South Jeolla Credit Guarantee Foundation to actively support the recovery and renewed growth of small business owners in the region."