New Start Fund: KAMCO Offers 70% Principal Reduction Benefit.

According to recent data released by the Korea Asset Management Corporation (KAMCO), applications for the New Start Fund, a debt restructuring program for self-employed individuals and small business owners facing difficulties due to COVID-19, have reached a total of KRW 5.5536 trillion (including intermediary and purchase types). This means that 35,803 self-employed individuals and small business owners have applied for this relief program. The New Start Fund is proving to be a significant lifeline for those facing challenging times, with the promise of a substantial 70% principal reduction in debt restructuring benefits in the near future.

 

KAMCO's New Start Fund offers a ray of hope to self-employed individuals and small business owners navigating challenging times.

 

The New Start Fund, initiated by KAMCO, is a debt restructuring program designed for self-employed individuals and small business owners. It was launched in October of last year. With a budget of KRW 30 trillion, this program, established under government support, provides debt restructuring and reduces the principal of non-performing loans by 60% to 80% for business owners experiencing difficulties due to COVID-19.

 

Through this program, KAMCO acquires the debts of borrowers who have been delinquent for more than 90 days or those at risk of delinquency and proceeds with debt restructuring. It offers benefits such as interest reduction and long-term installment payments, with a limit of KRW 1.5 billion per person (KRW 1 billion with collateral and KRW 500 million without).

 

There are two primary debt restructuring methods. The first is the intermediary-type restructuring, which adjusts interest rates and repayment periods without reducing the principal of the applicant. As of the end of last month, this benefit was confirmed for 9,630 borrowers, with an average interest rate reduction of approximately 4.5%. This method focuses on reducing interest burden and extending the debt repayment period.

 

The second method is the purchase-type restructuring, in which KAMCO directly purchases the borrower's debt and provides benefits through principal reduction. Through this method, 15,370 borrowers have entered into debt restructuring agreements, with an average principal reduction rate of approximately 70%. This approach significantly eases the economic burden on self-employed individuals and small business owners struggling with severe debt problems.

 

KAMCO's New Start Fund offers a ray of hope to self-employed individuals and small business owners navigating challenging times. It provides an opportunity for them to economically stand up and embark on a new beginning. We hope that many more business owners will benefit from this relief program under the support of the government and KAMCO. The New Start Fund will be remembered as one of the valuable support programs for the hope and stability of our society.