South Korea is to extend the maturity on government loans for small businesses and mom-and-pop stores.
Finance Minister Hong Nam-ki announced at an emergency economic meeting on Thursday that he'll defer the principal repayments for small firms for 6 months until next March.
He said this extension of the due date is for loans borrowed from government institutions including the Korea SMEs and Startups Agency and Small Enterprise and Market Service.
This is on top of the debt relief measures provided through banks and other financial institutions, which were announced on Wednesday by the Financial Services Commission.
"Debt relief measures for small businesses, which were first introduced in April 2020 and have been extended twice, were set to end this September, but we will extend this for another six months to next March. We take this time to thank the financial institutions that have actively participated in this."
The government also plans to support borrowers by coming up with a long-term repayment plan and adjusting principal and interest payments for those struggling to repay their loans.
"As small businesses are going through difficulties, extending debt relief measures would be supportive. But methods that can lead to an increase in revenue for those businesses would be more helpful, including providing emergency relief funds."
And the ministry said it will expand funds for unsecured loans for small travel agencies who were hit especially hard by the pandemic.
It will be increased from the current 43 million U.S. dollars to 85 million dollars next year.
To boost consumer spending, the ministry said it would expand its cashback scheme on credit card payments so that consumers can also get cashback for online purchases.
The system gives consumers up to 100-thousand won or about 85 dollars cash back per month, if they spend at least 3 percent more on their credit cards than their average monthly consumption in the second half of last year.
This is to start from October and the ministry is to provide details after the Chuseok holiday.
Eum Ji-young, Arirang News.