Government to Provide Additional 5 Trillion KRW to Low-Credit Period Industry Partners and 2 Trillion KRW to Auto Parts Partners (Comprehensive)

Expansion of Entry Exemption System to Vietnam, Singapore, UAE, etc.
Separate Establishment of 'Digital Service Specialized Contract System'

Hong Nam-ki, Deputy Prime Minister and Minister of Economy and Finance, is delivering opening remarks while presiding over the '7th Emergency Economic Central Countermeasures Headquarters Meeting' held on the 19th at the Government Seoul Office in Gwanghwamun, Seoul.

[Asia Economy Reporter Kwangho Lee] The government will additionally introduce an operating fund support program worth 5 trillion won for period industry partner companies with low credit ratings that find it difficult to receive financial support. It will also promote financial support worth 2 trillion won+α, including guarantees, loans, and maturity extensions, for medium- and low-credit automobile parts partner companies.

Hong Nam-ki, Deputy Prime Minister and Minister of Economy and Finance, presided over the '7th Emergency Economic Central Countermeasures Headquarters (Economic Central Headquarters) Meeting' held at the Government Seoul Office on the 19th, stating, "The government is preparing a livelihood finance stabilization package worth 175 trillion won+α and supplying liquidity, but there are significant restrictions on financial access due to low credit ratings," and announced a specialized fund support program for period industry partner companies.

Deputy Prime Minister Hong explained, "This program is a method in which a special purpose vehicle (SPV) established through a 1 trillion won investment from the Period Industry Stabilization Fund purchases and securitizes partner company loan receivables from commercial banks."

He added, "It is a loan to support operating funds for partner companies experiencing financial difficulties, and especially since it is a method of granting additional loan limits beyond the existing loan limits, it is expected to provide practical help."

At the meeting, support measures for vulnerable companies in the automobile parts industry were also announced. Following the 500 billion won scale win-win special guarantee announced at the 5th Economic Central Headquarters meeting, financial support worth 2 trillion won+α will be promoted through guarantees, loans, and maturity extensions targeting vulnerable partner companies with medium and low credit ratings.

Deputy Prime Minister Hong emphasized, "Regarding guarantees, the state, local governments, and finished car companies will join forces to establish a special guarantee program worth 270 billion won, and a 30 billion won 'Project Joint Guarantee System' will also be operated for future vehicles, etc."

Regarding loans, he explained, "We will promote a 350 billion won scale win-win growth fund program, overseas asset-backed loans for overseas local subsidiaries, 300 billion won in finished car company accounts receivable-backed loans for first-tier partner companies, and 1 trillion won support regardless of credit rating using the Industrial Bank of Korea's 'Cheer Up Korea' special funds."

Additionally, he added, "Through the participation of policy financial institutions and the five major commercial banks?Shinhan, Woori, Kookmin, Nonghyup, and Hana Bank?we will extend the maturity of existing loans and guarantees for medium-sized partner companies by up to one year in bulk."

The meeting also discussed measures to facilitate the movement of businesspeople and export logistics. Deputy Prime Minister Hong stated, "We will expand the special entry system introduced by Korea and China to Vietnam, Singapore, the United Arab Emirates (UAE), and other countries, and also promote exemption from self-quarantine upon return after short-term business trips to countries with low transmission risk."

He continued, "Regarding logistics movement, we will support cost reduction in aviation and shipping industries, expand transportation capacity, and increase the number of countries supporting local joint logistics."

Regarding the last agenda item, the introduction plan for the digital service specialized contract system, Deputy Prime Minister Hong said, "In line with the post-COVID-19 era, we will separately establish a government specialized contract system specialized for cloud services, etc. When conducting public procurement, demand agencies will be able to contract through pre-registered digital services or adopt a catalog method that allows demand agencies to flexibly change contract conditions."

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