The government will soon start doling out compensation to pandemic-hit small merchants.

"The government is making seamless preparations to provide compensation to the self-employed starting in late October," First Vice Finance Minister Lee Eog-weon told a policy meeting Friday.

Over 1 trillion won has been set aside to fund the program aimed at providing assistance to small business owners for losses incurred due to state orders to shut down or suspend operations to contain COVID-19.

South Korea's toughest virus curbs, which limit business hours and private social gatherings, have been enforced since July 12, targeting the resurgence of infections in the greater Seoul area, home to half of the country's population of over 51 million.