Independent merchants to get low-interest loans

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Independent merchants to get low-interest loans

Self-employed shop owners and small merchants will get 1.8 trillion won ($1.6 billion) worth of loans with lower interest rates next year as the government seeks to support their businesses, officials said Tuesday.

Small merchants have been grappling with rising hiring costs and higher rental fees at a time when the nation’s economic growth is slowing in the face of sluggish private consumption.

The Financial Services Commission (FSC) unveiled a package of measures to help support small merchants, including loans with interest rates of some 2 percent.

The state-run Industrial Bank of Korea will provide the loans to small merchants in the first quarter of next year, the FSC said.

Separately, financial authorities will provide around 600 billion won in guarantees for loans to small merchants next year, the FSC said.

At the end of November this year, the number of self-employed people stood at 5.63 million, accounting for about 25 percent of the total workforce.

In 2017, self-employed people accounted for 25.4 percent of all workers in the country, compared with 10.4 percent in Japan and 10.2 percent in Germany.

Korea hiked its minimum wage by 16.4 percent this year and will raise it by 10.9 percent next year.

The sharp increase has stirred up strong objections from small merchants, who complain of higher labor costs amid an economic downturn. Critics also argue that the increase is hurting part-time jobs and weighing down the local economy.

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