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Banks join movement to cut rent for virus-hit businesses

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Namdaemun Market in central Seoul is mostly empty in this photo taken on Monday, due to fears over the spread of the coronavirus. / Yonhap
Namdaemun Market in central Seoul is mostly empty in this photo taken on Monday, due to fears over the spread of the coronavirus. / Yonhap

By Kim Bo-eun

Banks are joining a movement to support small businesses hit by the COVID-19 crisis, by lowering the rent for tenants in their buildings.

Hana Financial Group said Thursday it would take part in a nationwide initiative, cancelling three months rent for the self-employed and small-and medium-sized businesses who are tenants in its buildings in Daegu and North Gyeongsang Province. The region has been hit hardest by the virus due to mass community infections that occurred in meetings of the Shincheonji Church religious cult.

Hana said it would lower the rent for tenants in buildings in other regions by 30 percent for the next three months.

Shinhan Bank said a day earlier it would join the movement. "We have come up with comprehensive support measures for our clients, to carry out our role as a responsible firm," a bank official said.

Woori Bank said it would lower loan interest rates and fees for building owners taking part in the plan.

The Industrial Bank of Korea (IBK) said Sunday it would support 55 businesses by paying their 50 million won in rent for the next three months.

The movement gained steam after 14 owners of buildings in the Jeonju Hanok Village ― a tourism hotspot ― said Feb. 12 they would lower the rent for tenants by up to 20 percent, after the village was hit hard by a drop in visitors due to the spread of the virus.

Days later, approximately 60 owners of buildings in Jeonju's traditional market and other buildings downtown said they would not raise the rent for tenants affected by the slump in domestic consumption.

The movement has spread to Seoul, Gyeonggi Province, Busan, Daejeon and Gwangju, among other regions.

In Seoul, owners of the buildings in Namdaemun Market said they would lower the rent by 20 percent for 2,000 tenants for the next three months.

The government is currently considering offering incentives such as tax cuts for building owners taking part in the plan.

Banks have also rolled out other measures to support affected SMEs.

Woori Bank said it has provided emergency loans of up to 400 billion won to SMEs in the restaurant, accommodation and tourism sectors and is extending the maturity date for loans to SMEs that are facing a liquidity shortage due to plunging sales.


Kim Bo-eun bkim@koreatimes.co.kr


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