58 Trillion KRW Supplied to Small Businesses and SMEs... "Support for Large Corporations if Needed"

[Image source=Yonhap News]

[Asia Economy Reporter Oh Hyung-gil] The government will expand financial support not only for small business owners and self-employed individuals facing difficulties in funding supply due to the novel coronavirus infection (COVID-19) but also for large corporations.

According to the financial market stabilization measures related to COVID-19 announced by the government on the 24th, the scale of policy finance supply to vulnerable real sectors will be expanded to 58 trillion won.

The plan is to proactively supply corporate funds centered on policy financial institutions.

Following the first emergency economic meeting where a total of 29.2 trillion won in financial support measures for small and medium-sized enterprises (SMEs) and small business owners were prepared, an additional 29.1 trillion won in funding support including SMEs, mid-sized companies, and large corporations has been arranged.

First, loans to SMEs and mid-sized companies will be expanded to a total of 21.2 trillion won. Korea Development Bank will be responsible for 5 trillion won, Industrial Bank of Korea 10 trillion won, and Export-Import Bank of Korea 6.2 trillion won.

The target includes domestic SMEs, mid-sized companies, and large corporations experiencing management difficulties due to economic downturn and decreased exports and imports.

Support will be provided for emergency management stabilization funds due to sales decline, funds required to resolve raw material supply instability, and working capital to alleviate other short-term liquidity difficulties.

Additionally, 7.9 trillion won, including 5.4 trillion won from the Korea Credit Guarantee Fund and 2.5 trillion won from the Export-Import Bank, will be used to supply guarantees for credit-vulnerable SMEs and mid-sized companies.

These funds are intended for emergency management stabilization due to sales and income decline, working capital needs caused by export and import sluggishness, and overseas business credit enhancement, with special limits granted within existing guarantee limits.

A financial authority official said, "Since corporate funding difficulties are spreading to mid-sized and large companies, we plan to secure the capacity to support corporate funds," adding, "Policy financial institutions will expand policy finance supply to the maximum extent in the short term up to the critical point level, and private financial companies will also work together to alleviate corporate funding difficulties, such as extending loan maturities."

Major Details of Policy Financial Institutions' Fund Supply Expansion (Source: Financial Services Commission)

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