S. Korea pledges $57 bln to support SMEs

By Aya El Sayed On Feb 15, 2024

The skyline of central Seoul is seen during a foggy day in Seoul March 4, 2015.Picture taken on March 4, 2015. REUTERS.

South Korea sets up a $56.97 billion financial aid programme to assist companies investing in vital sectors and small businesses grappling with high interest rates, as reported by Reuters on Thursday.

The initiative comprises cheap policy loans worth 15 trillion won from a government bank for crucial industries like semiconductors and batteries.

Additionally, commercial banks will contribute 20 trillion won to aid small and medium-sized enterprises (SMEs), according to a statement by the Financial Services Commission on Thursday.

“Our banks need to start making efforts to expand support for companies beyond consumer financing focused on mortgage loans,” stated Chairman Kim Joo-hyun.

Kim highlighted that changing trade dynamics with China, technological progress in key sectors, and the breaking up of global supply chains are presenting new hurdles for businesses.

These challenges underscore the necessity for regulatory changes and financial backing.

The commission announced that banks will temporarily reduce interest rates for companies struggling with liquidity issues this year due to high interest rates.