South Korea's Financial Services Commission will work with the Ministry of SMEs and Startups and others to proactively support small merchants facing management crises.

The FSC said on Thursday it signed a memorandum of understanding with the SMEs ministry at the Korea Federation of Banks building in central Seoul for proactive and integrated support for small merchants facing management crises and for low-income and vulnerable groups.

The move followed criticism that while small merchants' management risks have grown amid a recent rise in business closures and loan delinquency rates, many fail to apply for appropriate support because they do not accurately recognise their situation or find it difficult to check complex support policies one by one.

Seven related organisations joined the agreement, including the Small Enterprise and Market Service, the Korea Credit Guarantee Foundation, the Korea Inclusive Finance Agency, the Credit Recovery Committee and the Korea Federation of Banks.

The Small Enterprise and Market Service, regional credit guarantee foundations and 17 commercial banks will select small merchants deemed at risk of management difficulties. They will proactively provide tailored policy information, including the "My Store Management Diagnosis" service on "Small Merchant 365", a commercial district analysis service, and counselling at the New Start Support Center.

Guidance will start on March 31 and is expected to be provided monthly or quarterly to 100,000 to 200,000 small merchants a year.

FSC Chairman Lee Eok-won (이억원) said, "We changed the service from an administrative supplier-centric approach to a policy user-centric one." He added, "I hope the financial-employment-welfare linkages of integrated support will inject economic vitality."