Government and Banks Unite to Provide Comprehensive Financial Support for SMEs and Small Businesses Affected by COVID-19

[Asia Economy Reporter Kim Hyo-jin] Financial authorities and banks are making extensive efforts to support those affected by the novel coronavirus infection (COVID-19).

According to financial authorities on the 8th, the government held the 'Economic Ministers' Meeting on Novel Coronavirus Response' the previous day, involving the Financial Services Commission, Ministry of Strategy and Finance, and Ministry of SMEs and Startups, and decided to supply a total of 2 trillion KRW to small and medium-sized enterprises (SMEs) and small business owners who have been affected or are expected to be affected by the spread of COVID-19.

KDB Industrial Bank will provide 300 billion KRW, IBK Industrial Bank 100 billion KRW, and Korea Eximbank 1 trillion KRW. The Korea Credit Guarantee Fund plans to supply 300 billion KRW, the Korea Technology Finance Corporation 100 billion KRW, and regional credit guarantee foundations 100 billion KRW. The Small and Medium Business Corporation and the Small Enterprise and Market Service will also supply 25 billion KRW and 20 billion KRW respectively.

Kim Tae-hyun, Secretary General of the Financial Services Commission, explained, "We decided not to limit support by industry because restricting industries could artificially hinder business activities," adding, "Whether to support will be determined independently by each policy financial institution."

Major commercial banks are also stepping up their support. KB Kookmin Bank is providing new loans up to 500 million KRW to companies temporarily facing difficulties due to reduced overseas travel demand or group reservation cancellations caused by fear of COVID-19 infection, offering an interest rate discount of up to 1.0 percentage point.

Shinhan Bank plans to significantly increase the scale of new loans to affected SMEs and defer repayment schedules for existing loans. It will reduce interest rates by up to 1.0 percentage point when deferring or refinancing existing loans. Additionally, Shinhan Bank will prepare measures to support local Korean residents and Korean companies through its China branch.

Hana Bank will provide emergency management stabilization funds totaling 300 billion KRW, with up to 500 million KRW per company, to SMEs and individual business owners engaged in travel, lodging, and restaurant industries.

Accordingly, when existing loans of SMEs in these industries mature, Hana Bank will extend the maturity up to one year without principal repayment and defer installment repayments for up to six months. Interest rate reductions of up to 1.3 percentage points will also be supported.

Woori Bank will supply special funds amounting to 100 billion KRW targeting SMEs involved in China-related import and export and small business owners in food, lodging, and tourism industries. New loans and non-repayment loan extensions will each be conducted at a scale of 50 billion KRW. Loan interest rates will be discounted by up to 1.3 percentage points, and foreign exchange fees will also be preferentially treated.

NH Nonghyup Bank will provide financial support to individuals hospitalized or quarantined due to COVID-19 infection, SMEs with China import-export performance, and small business owners (including SMEs) in industries such as medical institutions, travel, lodging, and performance sectors that are expected to be affected.

Companies can receive new funds up to 500 million KRW, and individuals up to 100 million KRW, with loan interest rate reductions of up to 1.00% (up to 1.70% for farmers) and interest payment deferrals for up to 12 months.

As the spread of the novel coronavirus infection continues, medical staff are seen conversing at the screening clinic of the National Medical Center in Jung-gu, Seoul, on the 7th./Photo by Kim Hyun-min kimhyun81@

This content was produced with the assistance of AI translation services.