DAEJEON, South Korea – Daejeon City announced today an expanded and tailored support policy for small business owners grappling with a sluggish domestic economy. The initiative aims to alleviate financial burdens and stimulate consumption across the city.
According to city officials, during the first half of 2025 (January-June), Daejeon provided a substantial 458 billion Korean Won in ultra-low interest special funds to 14,675 businesses struggling with a complex crisis of economic downturn, high interest rates, and rising raw material costs. Additionally, 54,417 businesses received 500,000 Won each in business recovery grants. The city swiftly secured the necessary budget for these grants through its first supplementary budget and streamlined the application process, reducing required documents to just three, enabling sequential payments within a week of application.
This financial support was implemented in direct response to on-the-ground demand. The Daejeon Credit Guarantee Foundation's guarantee issuance performance for the first quarter ranked first among 15 foundations nationwide, excluding Seoul and Gyeonggi, which are significantly larger economic regions. Furthermore, its non-performing loan ratio remained the lowest in the nation at 3.72%, underscoring the effectiveness and prudent management of the support programs.
For the second half of the year (July-December), Daejeon City plans to further reduce fixed costs for small businesses and incentivize consumption. The city will prioritize supporting four key fixed expenses: rent, labor costs, card payment communication fees, and delivery fees.
Funding for rent subsidies will double compared to last year, with a budget of 3.4 billion Won allocated to support a total of 10,000 establishments, providing up to 600,000 Won per business annually. The criteria for labor cost support will be expanded by eliminating previous restrictions based on annual sales and number of employees, thereby increasing the number of eligible businesses. In a nationwide first, support for card payment communication fees will commence in July, offering up to 110,000 Won to approximately 8,000 businesses. Traditional markets and shopping districts will also receive up to 100,000 Won per month for delivery fees per business, and seven traditional markets will be provided with free delivery vehicles.
Furthermore, the city will activate the local currency, "Daejeon Love Card," a month earlier than planned, starting in July. The monthly purchase limit will be increased from 300,000 Won to 500,000 Won, with users accumulating 7% of the amount spent. For instance, spending the full 500,000 Won would yield 35,000 Won in benefits. This card can be used at affiliated stores in the Daejeon area with annual sales of 3 billion Won or less. However, certain businesses, such as department stores, large supermarkets, and adult entertainment venues, are excluded.
Daejeon City has secured 5.2 billion Won in national funding for the local currency through the central government's first supplementary budget and is currently allocating an additional 13 billion Won in local funds. The city also plans to secure corresponding financial resources and develop strategies to revitalize the Daejeon Love Card in conjunction with the 600 billion Won in national local currency support included in the government's second supplementary budget. Mayor Lee Jang-woo stated, "In the first half of the year, we achieved tangible results through an unprecedented scale of financial support. In the second half, we will focus on reducing fixed costs and boosting consumption to spread warmth throughout the local economy."
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