[Kibo]
[Kibo]

Targets SMEs in special disaster zones: Andong, Uiseong-gun, Geoje, Tongyeong

Guarantee default processing deferred even if arrears, seizures or credit deterioration occur

Covers areas hit by heavy rains in July–August; disaster damage certificate required

Korea Technology Finance Corporation said Monday it will implement special relief measures to prevent small and medium-sized enterprises in flood-hit special disaster zones from being classified as insolvent due to temporary liquidity shortfalls.

The measures apply to SMEs with business premises in designated special disaster zones — including Iljik-myeon, Namseon-myeon and Imha-myeon in Andong, North Gyeongsang Province; Danchon-myeon in Uiseong-gun; and Geoje and Tongyeong in South Gyeongsang Province. Companies must verify actual damage through a disaster SME confirmation certificate or equivalent documentation.

Parts of Andong and Uiseong-gun in North Gyeongsang Province were declared special disaster zones on Aug. 7 following heavy rainfall in July. The affected areas included Iljik-myeon, Namseon-myeon and Imha-myeon in Andong, and Danchon-myeon in Uiseong-gun. The Ministry of Interior and Safety said the areas met the criteria for the designation after local government self-assessments and joint on-site inspections by related ministries.

In South Gyeongsang Province, Geoje and parts of Tongyeong — including Sanyang-eup and Bongpyeong-dong — were initially declared special disaster zones following heavy rains from Aug. 15 to 18. Geoje recorded 956.1 millimeters of rainfall during that period, while Tongyeong received 766.9 millimeters. Geoje's peak hourly precipitation reached 124.5 millimeters. The storms caused flooding of homes, schools and traditional markets, as well as road damage and landslides.

Kibo said the measures are designed to prevent companies facing temporary liquidity problems from natural disasters from having those difficulties escalate into formal guarantee default proceedings.

Qualifying companies will have guarantee default processing deferred for a set period even if they fall behind on principal or interest payments, or if their business premises are subject to seizure, provisional seizure or provisional disposition. Deferral also applies when a company is registered for debt default or public information with Korea Credit Information Services, or when the representative's credit standing deteriorates.

Kibo will also postpone its own bond-preservation measures — including provisional seizures and dispositions it would otherwise execute directly — giving affected companies time to stabilize rather than immediately initiating debt-recovery procedures when financial problems arise during the recovery process.

However, companies for which operational recovery is objectively deemed unlikely — such as those that have already received a guarantee default notice from a creditor bank, or whose premises are subject to ongoing auction or public sale proceedings — are excluded from the measures.

"I hope these measures help flood-affected SMEs recover quickly and restore normal operations," Kibo Chairman Kwon Hyung-taek said. "We will do our best to support affected companies in rebuilding their business foundations as soon as possible."


hong@heraldcorp.com