Government to Boost Self-Reliance of Social Solidarity Economy with Expanded Financial, Market, and Tax Support

The Lee Jae-myung administration has unveiled its first comprehensive plan for the social solidarity economy, aiming to foster social enterprises, cooperatives, and other related organizations into a region-based growth ecosystem through financial and market support.

The core of the plan is to build a support system spanning from startup to growth, enhance financial accessibility to boost self-reliance, and cultivate the social solidarity economy as a key player in solving local issues in areas closely related to daily life, such as care, housing, energy, and rural communities.

The Ministry of the Interior and Safety announced the "Comprehensive Plan for the Development of the Social Solidarity Economy," prepared jointly by relevant ministries, during a cabinet meeting presided over by the President this morning (June 30).

The social solidarity economy is an economic activity that pursues social values and innovates local communities through cooperation and democratic operation among its members, encompassing the activities of social enterprises, cooperatives, and self-sufficiency enterprises.

First, the government will expand financial support for the sustainable growth of social solidarity economy organizations.

The annual support scale of the Microfinance Promotion Agency will be increased from 6 billion won to 15 billion won, and the guarantee supply scale of the Korea Credit Guarantee Fund will be expanded from 250 billion won this year to 350 billion won by 2030.

The government will also support impact fund investments for companies that create social value.

Private financial support will also be expanded.

The banking sector will increase loans for the social solidarity economy to 4.3 trillion won between 2026 and 2028, and the National Credit Union Federation of Korea (NACUFOK) will expand loans by 200 billion won over the next five years.

The government will also push for an amendment to the Credit Union Act to allow individual credit unions to invest in other corporations.

Along with the enactment of the Framework Act on the Social Solidarity Economy, the government plans to establish a sustainable financial ecosystem by designating specialized institutions and intermediaries for social solidarity finance.

Support for each stage, from startup to growth, will also be strengthened.

The government will provide customized startup support by type for social enterprises and create a dedicated track for social solidarity economy startups within three years of inception in the initial startup package, offering up to 100 million won in commercialization funds.

Companies with high growth potential will receive integrated support, including incubation, consulting, funding, market access, and exports.

System improvements to expand market access will also be pursued.

When the government outsources public services to the private sector, it will identify relevant cases and provide guidance to local governments to prioritize social solidarity economy organizations.

Social enterprises and social cooperatives will be exempted from bid bonds (5%) when signing public contracts with local governments, and the government plans to introduce a mandatory public procurement system after the enforcement of the Framework Act on the Social Solidarity Economy.

The government will push for reductions in acquisition and property taxes for social cooperatives and village enterprises, and expand reductions in usage fees and rental fees for state-owned and public property.

Based on financial and market support, the government will also create a region-based social solidarity economy ecosystem.

It will support the development of region-specific innovation models for the 17 local governments selected this year and provide work experience in social solidarity economy organizations to 2,500 unemployed young people.

Through the enactment of the Framework Act on the Social Solidarity Economy, the government will also build a system to manage policies currently dispersed across ministries at a pan-governmental level.

It plans to establish basic and implementation plans for central and local governments, set up a presidential committee and policy centers, and create a platform to manage policy and statistical data, as well as a performance management system.

Furthermore, the government will spread leading models focusing on four major areas with high demand from local residents: care, housing, energy, and rural communities.

It will foster local consortiums involving social solidarity economy organizations for community-based integrated care and increase housing supplied by these organizations.

The government plans to create more than 700 "Sunshine Income Villages" per year—where resident cooperatives use solar power generation profits for local welfare—and increase the number to over 3,000 by 2030.

Minister of the Interior and Safety Yun Ho-jung stated, "The role of the social solidarity economy is crucial to supplement local public services such as care and housing, and to overcome national crises such as polarization and regional extinction." He added, "We will implement this comprehensive plan without fail in cooperation with relevant ministries so that more social solidarity economy organizations can be created and grow in each region."

(Photo: Provided by the Ministry of the Interior and Safety, Yonhap News)
※ Please note: This article was translated by AI and may contain errors.