Chairman Kim Ki-mun of Korea Federation of SMEs (KBIZ). (Photos: KBIZ)

Starting Nov. 13, Korea Federation of Small and Medium Business (KBIZ) has been extending medical and disaster loans sans interest under the Yellow Umbrella for Small Businesses and Merchants’ Mutual Aid.

Beneficiaries of the aid, who have been hospitalized for diseases or injury for more than five days or have suffered disaster damage, are extended a maximum of 10 million won and 20 million won in loans, respectively. The loans do not carry any interest.

KBIZ has already lowered the interest for small cash-strapped business merchants, ranging between 0.5 percentage points to 2.9 percent. The lower interest benefitted 140,000 mutual aid borrowers, who have saved about 7 billion won in combined interest fees, KBIZ officials said.

Those who have signed up for the Yellow Umbrella for Small Businesses and Merchants’ Mutual Aid program are entitled to income tax deduction and a yearly compounded interest payment.

KBIZ has overhauled the Yellow Umbrella, a mutual aid program designed to help small business enterprises and entrepreneurs prepare for difficult times they might have in the future.

Entry barriers have been lowered to help more small businesses and merchants benefit from the mutual aid fund. It is revamped so that services can be made without face-to-fact contacts to correspond to the mobile-first era.

The mutual aid is to help small business enterprises and entrepreneurs prepare for the future, such as going out of business or life after retirement, by saving money on an installment basis.

They can use the money to either restart their business or safeguard their retirement. In particular, members of the mutual aid can keep intact the savings even if it is excluded from the scope of seizure in the case of their business failures.

The KBIZ estimated that 36.7 percent of the nation’s total merchants and small business owners across the nation have signed up for the mutual aid. Figures released by KBIZ showed that the members of the mutual aid are tallied at 1,858,093.

They included 216,672 members who have multiple subscriptions. The membership is most likely to surpass the 2 million threshold in the first half of next year. Members who pay between 60,000 won and 240,000 won in their monthly premiums account for 29.7 percent of the total members, the biggest share.

Park Yong-man, head of the Division of Mutual Aid Fund, said, “We’ve struck an MOU with seven organizations, including the beauty parlor federation KOCOA and Korea Association of Certified Public Tax Accountants.” He expressed hope more small business merchants will sign up for the Yellow Umbrella for Small Businesses and Merchants’ Mutual Aid.

Yellow Umbrella Designates 10 Managers to Manage 120 Billion Venture Capital

Yellow Umbrella for Small Businesses and Merchants’ Mutual Aid under the umbrella of KBIZ has designated 10 commission managers to manage a 120 billion won capital fund.

They are LB Investment, TS Investment, DSC Investment, Stone Bridge Ventures, Atinum Investment, Neo Plus, Kakao Ventures, and Kolon Investment.