Gwangju Bank announced on August 11 that its S.O.S (Save Our Small_business) Project, launched in collaboration with the Jeonnam Credit Guarantee Foundation, is yielding positive results for struggling small businesses.
Local small businesses are reportedly recovering from management difficulties and experiencing actual sales growth.
The S.O.S Project aims to identify small businesses in Jeonnam facing management crises due to high interest rates and economic downturns, providing them with tailored recovery support services, including financial assistance, management consulting, and debt restructuring.
In March, Gwangju Bank signed an agreement with the Jeonnam Credit Guarantee Foundation to establish a two-track support system. This includes 'Management Improvement Support' for businesses showing signs of distress and 'Recovery Support Guarantees' for small businesses that have fallen behind on payments but demonstrate a willingness to recover and potential for revival.
Through this initiative, the bank has committed to supplying 5 billion won in funding.
As of the end of July, the S.O.S Project has provided guarantees for 69 cases, totaling 1.55 billion won. Of these, 41 cases were for Management Improvement Support, amounting to 1.096 billion won, while 28 cases were for Recovery Support Guarantees, totaling 455 million won.
Notably, Gwangju Bank's Inclusive Finance Center conducts specialized financial consultations for businesses that struggle to access traditional financial institutions due to declining credit ratings, overdue payments, or multiple debts. They assess the businesses' willingness to recover and their potential for revival to connect them with necessary funding.
For businesses eligible for debt reduction, the center guides them through the relevant procedures and collaborates with local governments to lower the average interest rate on support funds to around 2%, thereby alleviating financial burdens.
The effectiveness of the management improvement efforts has also been confirmed. A review of 10 businesses that received guarantees more than two months ago found that all were still operating. Among them, eight businesses reported increased sales compared to before the guarantee was executed.
The average sales increase for businesses under Management Improvement Support was 18.9%, while those under Recovery Support Guarantees saw an average increase of 17.3%.
Jung Il-seon, President of Gwangju Bank, stated, “The S.O.S Project is a practical example of effective inclusive finance that goes beyond mere declarative cooperation to provide actual financial support and opportunities for small businesses to recover. We will continue to work closely with the Jeonnam Credit Guarantee Foundation to actively support the recovery and resurgence of local small businesses.”
* This article has been translated by AI.
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