The government is set to implement an artificial intelligence (AI)-based crisis alert system to detect early signs of distress in 250,000 small businesses, facilitating rapid response measures.
On July 8, the Ministry of SMEs and Startups announced the 'Support Measures for Small Business Rebound' during a joint meeting of the Emergency Economic Headquarters and the Ministerial Meeting on Economic and Industrial Competitiveness.
According to Korea Evaluation Data (KODATA), the proportion of marginal small businesses rose from 6.5% in 2020 to 7.9% in 2022, with projections indicating an increase to 8.8% by 2024. The ministry's analysis revealed that approximately 55,000 businesses, nearly half of the total, are experiencing or showing signs of crisis in terms of growth and finances.
Among financially distressed companies, 45% of marginal firms have reported increased sales, suggesting that timely support for structural improvements could help them stabilize.
In response, the government plans to establish a new rebound system that detects and alerts businesses to crisis situations before they escalate, while also identifying those with high growth potential for tailored support based on the type of crisis.
Specifically, the Small and Medium Business Corporation will expand its early warning management from 60,000 loan companies to encompass all 250,000 small businesses, implementing an 'AI-based Small Business Crisis Alert System' that analyzes not only financial data but also unstructured data such as news and industry trends to detect early signs of crisis at both the individual and regional levels.
The crisis alert index for each business will be categorized into four levels: normal, caution, preliminary alert, and alert. Businesses in the preliminary alert and alert stages will receive notifications about their crisis status and information on rebound support programs via text messages and social media.
The criteria for evaluating support for structural improvements will be revised to focus on stabilization and growth potential, with streamlined funding evaluation processes and preferential loan terms for companies that demonstrate strong performance in implementing management improvement plans.
Earlier, in March, the ministry launched the 'Small Business Crisis Alert Talk' service to proactively manage the operational crises faced by small business owners and assist in their recovery.
Yoon Yong-seok, First Vice Minister of the Ministry of SMEs and Startups, stated, "Through this initiative, we will concentrate our policy capabilities and resources to help small businesses with growth potential overcome crises through structural improvements and transitions to new business models, securing new growth engines."
* This article has been translated by AI.
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