South Korea pledges $39 billion emergency funding for small businesses

A woman wearing a mask to prevent contracting the coronavirus looks at a view of central Seoul
FILE PHOTO: A woman wearing a mask to prevent contracting the coronavirus looks at a view of central Seoul, South Korea, March 17, 2020. REUTERS/Kim Hong-Ji

South Korean President Moon Jae-in pledged 50 trillion won ($39 billion) in emergency financing for small businesses and other stimulus measures on Thursday to prop up the coronavirus-hit economy.

The package is the latest in a string of steps the South Korean government has taken to curb pressure on Asia’s fourth-largest economy, including an interest rate cut, an extra 11.7 trillion won (7.9 billion pounds) budget and more dollar supplies.

The government will issue loan guarantees for struggling small businesses with less than 100 million won ($78,000) in annual revenue to ensure they can easily and cheaply get access to credit, Moon said.

Domestic commercial banks and savings banks will also allow loans to be rolled over for small businesses if they cannot afford payment when due, he said.

“We’ve decided to take the measures to prevent small and medium firms and merchants and the self-employed from going bankrupt and ease anxiety in the financial sector”, Moon told an emergency economic policy meeting.

“As the situation unfolds, we will scale them up if necessary.”

The crisis has jolted South Korea’s financial market, soured business and consumer confidence and disrupted manufacturing.

South Korea has been hit hard by the coronavirus, which emerged in China late last year, but has in recent days appeared to be getting the outbreak under control.

The Korea Centers for Disease Control and Prevention (KCDC) reported 152 new cases on Thursday, taking total infections in South Korea to 8,565. The death toll rose by two to 93 as of late Thursday.

That daily tally reversed a downward trend in new infections after new, small-scale outbreaks emerged.

South Korea had recorded fewer than 100 new infections for four days in a row until Wednesday.

At least 139 cases have been linked to a Seoul-based call centre run by an insurance company, while another 64 cases were traced to a Protestant church in Seongnam, south of Seoul, the KCDC said.

Some 75 patients and workers at a nursing home in the hardest-hit city of Daegu, southeast of Seoul, have also tested positive.

That outbreak prompted the city to launch extensive checks on other nursing homes together housing more than 33,000 people, which discovered seven new cases at five facilities.

South Korea has begun imposing tighter border checks for all arrivals from overseas, following recent rises in infected travellers.

“We are confident that we can and will win the war on the coronavirus,” KCDC deputy director Kwon Jun-wook told a briefing.

“But in the course of our individual battles, we might hit a snag, get caught off guard or let our front line (get) breached … so please stick to personal hygiene rules and social distancing as your new daily routine.”

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