Shinbo Implements 1.8 Trillion KRW Policy Finance Agreement Guarantee for SMEs

by Yoo Jaehoon

Published 28 Apr.2023 09:12(KST)

Korea Credit Guarantee Fund

The Korea Credit Guarantee Fund (KODIT) is partnering with banks to provide approximately 1.8 trillion KRW in financial support for small and medium-sized enterprises (SMEs).

On the 28th, KODIT announced that it will support 1.842 trillion KRW in policy financing for SMEs struggling due to the economic slowdown. This funding is sourced from a total of 59.5 billion KRW in bank contributions (45.5 billion KRW in special contributions and 14 billion KRW in guarantee fee support).

First, KODIT signed a long-term, low-interest financial support agreement with Industrial Bank of Korea (IBK) for SMEs engaged in core strategic industries and promising small business owners. Under this agreement, a total of 402 billion KRW in special contribution guarantee loans with maturities of 5 years (for SMEs) or 10 years (for small business owners) will be provided to export SMEs, venture companies, and promising small business owners.

Additionally, through a financial support agreement with IBK to revitalize facility investments, 200 billion KRW in guarantee loans will be supplied for SME facility funds, and guarantee fees will be supported up to 1.0 percentage point annually for three years.

Moreover, KODIT has signed financial support agreements with NongHyup Bank, Woori Bank, and Shinhan Bank for core strategic industries. These agreements will provide 1.24 trillion KRW in guarantee loans to companies engaged in new growth engine industries and job-creating companies. According to the special contribution agreements with these banks, guarantee ratios (up to 100%) and guarantee fee rates (a 0.2 percentage point reduction) will be preferentially applied for three years. Additionally, guarantee fee support agreements will provide a 0.5 percentage point annual guarantee fee reduction for two years, helping to create a stable management environment for companies.

A KODIT official stated, “Through this business agreement, we will provide practical assistance to companies facing difficulties due to worsening domestic and international economic conditions by facilitating smooth funding and reducing financial burdens. Going forward, KODIT will continue to fulfill its role as a policy financial institution to help SMEs recover competitiveness and revitalize the economy.”