Suwon City Partners with Banks and Guarantee Institutions for Large-Scale Loans to SMEs... 300 Billion KRW in Total

Lee Jae-jun, Mayor of Suwon (center), is taking a commemorative photo after signing a loan support agreement with Si Seok-jung, Chairman of the Gyeonggi Credit Guarantee Foundation (second from right), and senior officials from guarantee institutions and banks at Suwon City Hall on the 11th.

The city of Suwon in Gyeonggi Province is the first in the nation to collaborate with banks and three guarantee institutions to provide loan funds worth 300 billion KRW to small and medium-sized enterprises (SMEs) within the city. Additionally, by linking loan and guarantee systems, loan interest rates will be significantly reduced, and support for guarantee costs will be expanded.

On the 11th, Suwon City signed a business agreement for the 'Suwon City SME Accompaniment Support' with IBK Industrial Bank of Korea, Korea Credit Guarantee Fund, Korea Technology Finance Corporation, and Gyeonggi Credit Guarantee Foundation at the city hall's medium conference room.

According to the agreement, SMEs located in Suwon will receive reduced loan interest rates linked to credit and technology guarantee systems. Furthermore, they can receive additional support of 2% interest and guarantee fees up to an annual rate of 1.2%. The total loan amount is 300 billion KRW over three years, with a maximum loan amount of 500 million KRW per company.

Previously, Suwon City's SME funding support projects were limited to specific industries such as manufacturing, resulting in non-manufacturing companies receiving smaller loan amounts and lower interest support rates compared to manufacturing companies. Also, Suwon City's special guarantee offered preferential guarantee rates but did not support guarantee fees.

With this agreement, non-manufacturing SMEs will be able to receive loans of the same amount as manufacturing companies. Moreover, by linking loans and guarantees, SMEs with low credit or insufficient collateral will receive guarantee issuance and support for guarantee costs after guarantee screening, significantly lowering the financial barriers for SMEs to secure funds.

Lee Jae-jun, Mayor of Suwon City, stated, "According to the Bank of Korea, as of May, the domestic SME loan scale is approaching 973 trillion KRW, and interest burdens have increased accordingly. We signed this accompaniment support agreement to reduce the interest burden for companies located in Suwon."

Si Seok-jung, Chairman of the Gyeonggi Credit Guarantee Foundation, said, "There was a recent article reporting that the quarterly delinquency rate of domestic banks has surpassed the highest level. This agreement is significant because it greatly lowered the threshold for guarantee support by uniting with one heart and one mind."

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