Evaluation of Small Business Support Programs

Published on November 4, 2025
Published by Economic Industrial ProgramEvaluation Division, Budget Analysis Department

   Small businesses are the bedrock of the national economy, representing 95.2% of all enterprises and supporting 45.2% of total employment in Korea. Despite their significance, they continue to face compounding challenges stemming from the prolonged economic downturn since the COVID-19 pandemic, high interest rates, and persistent inflation. Against this backdrop, this report reviews the major features of the government’s fiscal support programs for small businesses, identifies key issues by area, and proposes policy improvements.Based on the evaluation, while it is necessary to expand support for vulnerable small-business groups to alleviate their burden of financing costs, the government must also take proactive steps to promote managerial restructuring for businesses showing early signs of distress, thereby preventing deterioration in overall fiscal soundness.In addition, policy must be comprehensively recalibrated from a universal growth-support framework centered on short-term survival and protection to one that activates the “business growth ladder” for enterprises with genuine potential. Policy efforts should prioritize digital transformation, facilitate entry into online markets, and establish cooperative mechanisms with online platforms to ensure these interventions translate into gains in productivity and competitiveness.Swift debt adjustment for long-term delinquent borrowers is essential to facilitate their return to economic activity. This process must include rigorous program management to ensure fairness for diligent repayers and prevent moral hazard. Furthermore, expanded support for business closures, including assistance for sectoral transition, reskilling, and upskilling, is required to strengthen the pathways for successful re-entrepreneurship and stable reemployment.With regard to the policy implementation framework, it is imperative to adopt a more systematic approach to performance evaluation for small-business support plans, activate the legally mandated Committee for Deliberation on Policies for Micro Enterprises, and strengthen coordination and cooperation between ministries and local governments to enhance the reliability of small-business commercial-district analysis data.