Daegu Region SME Liquidity Supply of 100 Billion Won to Overcome COVID-19

Ministry of SMEs, Daegu City, and Korea Technology Finance Corporation Sign Win-Win Financial Support Agreement

Overview of the Business Agreement for Win-Win Financial Support for Small and Medium Technology Enterprises in Daegu City

[Asia Economy Reporter Kim Cheol-hyun] Liquidity funds amounting to 100 billion KRW will be supplied for small and medium-sized enterprises (SMEs) in the Daegu region. The Ministry of SMEs and Startups (Minister Park Young-sun, hereinafter referred to as the Ministry) announced on the 11th that it held a signing ceremony with Daegu Metropolitan City and the Korea Technology Finance Corporation (Kibo) to provide additional liquidity funds to SMEs located in Daegu to overcome the COVID-19 crisis and prepare for the post-COVID era.

The Ministry has consistently supplied guarantees averaging 1.13 trillion KRW annually over the past three years until last year to provide liquidity in the Daegu region, and as of the end of July this year, it has supported 750 billion KRW. In particular, through the first supplementary budget, 300 billion KRW of special COVID-19 guarantees were separately allocated for companies located in Daegu and Gyeongbuk, all of which were exhausted by the end of June. Additionally, through the third supplementary budget, 600 billion KRW is being supplied nationwide to SMEs affected by COVID-19.

The core of this additional liquidity fund supply is that Daegu City will contribute 5 billion KRW to Kibo to provide 100 billion KRW in guarantees to SMEs. Through this, the plan is to focus on supporting the early overcoming of the economic crisis and stabilization of management for SMEs in Daegu, while establishing an innovation growth foundation for technology SMEs such as venture and Inno-Biz companies, material, parts, and equipment companies, and automobile parts SMEs, thereby revitalizing the regional economy.

The Ministry supports preferential guarantees such as increased guarantee ratios, reduced guarantee fees, and expanded special circumstances amounts, and Daegu City will also provide interest subsidies using management stabilization funds for companies eligible for the agreement guarantees. The main support targets are technology SMEs located in Daegu recommended for management stabilization funds, including companies affected by COVID-19 and automobile parts companies, with working capital support up to a maximum limit of 1 billion KRW per company.

Through collaboration between the Ministry and Daegu City, comprehensive support covering the entire lifecycle of companies will be promoted, not only for fund procurement. To this end, services such as R&D guarantees, technology transfer brokerage, and technology dispute response will be provided in connection with Kibo's SME support programs. Daegu City’s efforts to foster key industries such as medical, healthcare, and advanced material parts, as well as overseas marketing and consulting, will also be supported through mutual cooperation.

Kang Sung-chun, Vice Minister of the Ministry, stated, "This agreement will be an important opportunity for SMEs in Daegu, which have high growth potential despite difficulties caused by COVID-19, to continue stable business activities and growth. Daegu City's voluntary initiative to supply additional liquidity funds to local SMEs is a timely measure, and the Ministry will do its best together with Daegu City to help local SMEs overcome the crisis and achieve innovative growth." He added, "We plan not only to execute liquidity funds but also to continuously communicate with the field and supplement policies."

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