**’을’ SMEs, “Difficult to Request Interest Rate Reduction from Banks”**
**Subcontracted Firms Face Joint Guarantee Demands from Trust Companies… Investigation Needed**
**Interest in Evaluating Large Companies and SMEs’ Efforts for Mutual Growth**
On the 7th, an ‘SME Entrepreneurs Meeting’ was held at the headquarters of the Korea Federation of SMEs in Yeouido, Seoul, with Financial Supervisory Service Governor Lee Bok-hyeon (third from left in the front row) and Kook-ki Mun, President of the Korea Federation of SMEs (second from left in the front row), among major attendees taking a commemorative photo.
“[Financial News]”
“Banks should not take away the umbrella when it rains.”
Kook-ki Mun, President of the Korea Federation of SMEs, addressed challenges related to SME loans to the financial sector.
On the 7th, the Federation held an ‘SME Entrepreneurs Meeting’ at its head office in Yeouido, Seoul.
During the meeting, there was a call for improving the interest rate spread between deposits and loans at banks. President Kim stated, “Banks quickly raise loan interest rates when the base rate rises, but are slow to lower them when the base rate goes down. It’s difficult for ‘Eul’ SMEs to go to bank counters and ask for a rate reduction. We’ve struggled with high-interest rates, so it would be good if the loan interest rates would be lowered just like when they were raised, following the base rate drop.”
The issue of real estate project financing (PF) guarantees was also mentioned. President Kim remarked, “When SMEs subcontract construction work from large construction companies, there is a practice where real estate trusts demand joint guarantees beyond the subcontract scope, potentially leading to responsibility issues for completion.” He also emphasized, “Although trust companies claim they informed subcontractors, affected companies had no choice but to accept unreasonable demands to secure work. I request the Financial Supervisory Service to thoroughly investigate this matter.”
He also urged interest in the Co-growth Finance Index. This index was created by the Co-growth Committee in 2012 to assess large companies’ efforts for mutual growth in the manufacturing and distribution sectors. President Kim stated, “I urge the financial sector to create a Co-growth Finance Index so that efforts for mutual growth with SMEs are properly evaluated.”
President Kim concluded, “I recall cooperating with the Financial Supervisory Service to improve the banks’ practice of requiring additional assurances during my last term as President of the Federation. I hope this meeting will serve as a basis for establishing a cooperation channel between the Korea Federation of SMEs and the Financial Supervisory Service.”