The Saechulbal Fund is a debt relief program initiated by South Korea to support small business owners and self-employed individuals facing financial difficulties. The program aims to mitigate potential insolvency risks and facilitate rapid recovery by offering debt restructuring options. As of the end of 2023, the fund had supported 175,000 applicants with a total requested amount of KRW 27.7 trillion and a contracted amount of KRW 9.8 trillion. The Financial Services Commission (FSC) oversees the program, collaborating with Korea Asset Management Corporation and Credit Recovery Committee.
The policy changes directly impact small business owners and self-employed individuals who are struggling with debt. Those who repay their debts early or maintain diligent repayment will now receive additional incentives, such as up to 10% extra debt reduction. Eligibility for payment deferral has been expanded to include cases of childbirth, parental leave, and families with severely disabled members or those suffering from four major critical illnesses. The program also connects participants with employment and entrepreneurship support initiatives, including youth employment academies and specialized retraining programs.
Implementation of these changes began in 2024, following a review held on January 26 by the FSC and related agencies. The new incentives for early repayment and diligent payment are now available, and payment deferral criteria have been broadened. Regional support, previously limited to Busan, will be extended to nine municipalities nationwide, with agreements and program launches scheduled for the first half of the year. The scope of beneficiaries has also expanded from only those with purchased debt restructuring contracts to include intermediated contract holders.
Frequently asked questions include: Who can apply for the Saechulbal Fund? Eligible applicants are small business owners and self-employed individuals facing debt difficulties. What are the new incentives for diligent repayment? Those who repay without delinquency for at least one year and make early lump-sum payments may receive up to 10% additional debt reduction. How can payment deferral be requested? Applicants experiencing childbirth, parental leave, or caring for severely disabled or critically ill family members can apply for payment deferral. For further information, contact the FSC Corporate Restructuring Division at 02-2100-2922.
The Saechulbal Fund’s enhancements are grounded in practical support for small business owners and self-employed individuals, addressing both financial and personal challenges. The introduction of new incentives for early and diligent repayment, along with expanded eligibility for payment deferral, demonstrates a commitment to fostering responsible debt management and facilitating recovery. The integration of regional and programmatic support, as well as the expansion of beneficiary coverage, is likely to increase the effectiveness and reach of the policy. Overall, these changes are expected to create a more resilient and inclusive financial environment for vulnerable groups.