43.3 Trillion KRW Supplied to SMEs and Small Businesses... 9 Trillion KRW Also Invested in PF Project Sites

Financial Services Commission Announces Joint Financial Support Measures for Vulnerable Sectors with Related Ministries

The government will supply a total of 43.3 trillion won in policy funds starting next month to support small and medium-sized enterprises (SMEs) and small business owners. Additionally, to ensure a smooth landing of the real estate market, it plans to newly inject 9 trillion won into project financing (PF) sites.

On the 27th, the Financial Services Commission announced the "Financial Support Measures for Vulnerable Sectors" in cooperation with related ministries, containing these details. First, the authorities will promptly execute 43.3 trillion won worth of "customized policy funds" necessary for the business activities of SMEs and small business owners starting next month. Specifically, 41.6 trillion won is allocated for SMEs and 1.7 trillion won for small business owners.

Regarding SMEs, the budget includes 2 trillion won to provide growth ladders, 21.3 trillion won to support entry into new industries and business expansion, 12.3 trillion won to respond to high interest rates and high inflation, 5 trillion won for companies experiencing temporary difficulties, and 1 trillion won to expand the scale of technology guarantee supply.

This year, the scale of new guarantee supply for small business owners will increase by 1 trillion won compared to last year, and the Small Enterprise and Market Service's policy funds for vulnerable small business owners will also expand by 700 billion won.

The Financial Services Commission explained, "SMEs and small business owners are the roots of our economy and the foundation of the livelihood economy, but due to prolonged high interest rates and high inflation causing increases in raw material and labor costs, their burden has intensified, resulting in significant interest burdens. To feel the economic recovery, it is very important to enhance their vitality."

[Image source=Yonhap News]

Support for real estate PF sites will also be strengthened. The government will expand PF site guarantee supply from the existing 25 trillion won to 30 trillion won, an increase of 5 trillion won, and will newly supply a total of 9 trillion won by introducing 4 trillion won in guarantees (from the Construction Guarantee Union) for non-residential projects as well.

The Financial Services Commission stated, "Since ensuring national housing stability and a smooth landing of the real estate market are important, we plan to actively strengthen financial support for PF sites and resolve financial difficulties related to PF for construction companies."

Regarding the 1.1 trillion won scale Korea Asset Management Corporation (KAMCO) "PF Normalization Fund," new loan financing will be permitted. Previously, the KAMCO fund only allowed discounted purchases of PF bonds at the bridge loan stage, but with this additional support, loans can now be extended to projects at the main PF stage as well.

For construction companies, necessary liquidity related to PF projects will be actively supplied. The authorities plan to actively execute about 8 trillion won in PF-related construction company support under the current market stabilization program to continuously supply liquidity. Specifically, this includes 2.8 trillion won for purchasing PF asset-backed commercial paper (ABCP), 4.2 trillion won in loans and guarantees for construction companies, and an additional 1 trillion won inclusion of construction companies in primary collateralized bond obligations (P-CBOs).

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