A financial support program worth 75.9 trillion won ($56.97 billion) has been prepared by South Korea for companies that are investing more in critical sectors and small businesses that are having trouble paying high-interest rates.
The Financial Services Commission said in a statement on Thursday that commercial banks will also contribute 20 trillion won to support small and medium-sized businesses. The program includes 15 trillion won in inexpensive policy loans from a state-run bank for important industries, such as semiconductor and battery.
Chairman Kim Joo-hyun stated, “Our banks need to start making efforts to expand support for companies, beyond consumer financing focused on mortgage loans.”
Kim stated that companies are facing new challenges because of the changing trade relations with China, technological advancements in major industries, and the fragmentation of global supply chains. These factors call for regulatory reform and financial support.
According to the commission, banks will provide a temporary interest rate reduction to businesses that are experiencing cash flow issues this year because of high interest rates.
