Emergency Financial Support Measures for Ukrainian Affected Companies Reviewed

[Asia Economy Reporter Song Hwajeong] The government will provide policy financing worth 2 trillion won to companies affected by Russia's invasion of Ukraine.

According to the Financial Services Commission on the 5th, under the emergency financial support program, 2 trillion won in policy financing will be provided to quickly resolve the financial difficulties of affected companies, and the maturity of existing loans will be extended.

First, through the own capacity of policy banks such as Korea Development Bank, Industrial Bank of Korea, and Export-Import Bank of Korea, 2 trillion won in special loans for new operating funds will be supplied to affected companies. KDB will support 800 billion won, IBK 700 billion won, and Eximbank 500 billion won respectively. The support targets include ▲domestic companies that have entered conflict areas such as Ukraine and Russia by establishing local corporations or branches, or factories ▲companies with export or delivery records to conflict areas in the past year (since January 1 of last year) or companies scheduled for export or delivery, submitting transaction proof documents ▲companies with import or purchase records from conflict areas since January of last year or companies scheduled for import or purchase, submitting transaction proof documents ▲related partner or supplier companies, and companies located in the value chain upstream and downstream are broadly included. In particular, support will be focused on medium-sized and small enterprises that may face relatively greater financial difficulties.

These companies will receive funds under preferential conditions such as reduced loan interest rates (40~100bp) and relaxed approval authority. KDB and IBK will operate a 'separate limit' within existing special loan programs, and Eximbank will establish a dedicated program to provide support.

Along with this, special repayment deferrals such as maturity extensions will also be implemented. Loans and guarantees from policy financial institutions including KDB, IBK, Eximbank, and Korea Credit Guarantee Fund will have their maturities fully extended for one year. However, companies considered non-performing before the Ukraine situation and those difficult to support with credit will in principle be excluded from maturity extensions, and each institution will decide on maturity extension after individual review. The Financial Services Commission plans to encourage voluntary extensions for loans from commercial banks.

Meanwhile, on the 4th, the Financial Services Commission held a practical meeting with the financial sector regarding financial sanctions against Russia to check the implementation status of the sanctions and discuss future plans.

Lee Sehun, Secretary General of the Financial Services Commission, reiterated the main contents of the government's announced financial sanctions against Russia and urged that there be no disruption in the on-site enforcement of the sanctions. He also emphasized thorough preparation in anticipation of the possibility of expansion in the targets and scope of sanctions, as the level of financial sanctions by major countries such as the US and the European Union (EU) is strengthening faster than expected.

He particularly stressed the importance of sufficiently informing customers to minimize their inconvenience. Secretary Lee said, "There have been complaints that some bank branches recently have not fully understood the contents of the financial sanctions and have refused transactions not directly related to the sanctions against Russia. Therefore, please pay special attention to ensuring that frontline staff fully understand the sanctions and can respond to customers appropriately."

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