Gov’t to provide 76 tln won in financial support for SMEs, new industries

Feb 15, 2024, 07:51 am

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Yu Eui-dong, policy chief of the ruling People Power Party (PPP), speaks during a government-ruling party consultation meeting at the National Assembly on Feb. 14, 2024./ Photographed by Lee Byung-hwa

AsiaToday reporters Hong Sun-mi & Chung Duk-soo

The government will prepare a special program to cut interest rates on high-interest loans by up to 2 percentage points over a year for small and medium-sized companies.

The customized corporate finance worth of 76 trillion won in total will be prepared to overcome the high-interest crisis and support new industries. For instance, the government will provide more than 20 trillion won in funds to high-tech industries that require large-scale facility investment and support companies that re-enter the domestic market with supply chain stabilization fund of 5 trillion won.

The government and the ruling party made the decision on Wednesday at the government-ruling party consultation meeting on supporting customized corporate finance to overcome the high-interest rate crisis and transform new industries.

The country’s five major banks, including KB Kookmin, Shinhan, Hana, Woori and NH Nonghyup, will participate in the financial support with a total of 20 trillion won.

The government will supply 19.4 trillion won for SMEs with high-interest loans and 56.3 trillion won for new industry transition.

Under the plan, the government plans to cut interest rates for SMEs by up to 2 percentage points over a year.

It will run a “fast-track normalization financial support program” worth 3 trillion won to provide additional interest rate exemptions for SMEs that temporarily suffer from liquidity shortages.

In addition, it will provide 11.3 trillion won worth of policy financing to ease the burden of high interest rates, such as supplying fixed-rate products worth of 2 trillion won that can be convert its interest rates depending on the interest rate situation.

#SMEs #new industries #high interest rate