Busan Dramatically Expands SME Support... Largest Operating Funds in the Country

Busan City has significantly increased its financial support for small and medium-sized enterprises (SMEs), making it the largest in the country.

The city announced on May 6 that, through a supplementary budget, it has expanded the operating funds for SMEs by an additional 500 billion won compared to the previous amount, bringing the total to 1.368 trillion won. The funds will be supplied starting in early May.

This measure appears to be aimed at easing the growing financial burden on companies caused by the prolonged conflicts in the Middle East and rising exchange rates. The support will be provided by first having the Busan Economic Promotion Agency conduct a review and issue a letter of recommendation, which is then submitted to commercial banks.

Support for existing beneficiary companies has also been strengthened. For companies whose loans mature this year, principal repayments will be deferred for six months. During this period, the interest burden will be reduced through an interest subsidy of 1.0% to 2.5%.

Separate financial support has also been prepared for joint raw material purchases. In cooperation with the Busan-Ulsan Regional Headquarters of the Korea Federation of SMEs and Busan Bank, 100 billion won in policy funds will be established. Each company can receive up to 800 million won, and leading local enterprises can receive up to 1 billion won. The interest subsidy rate has also been raised to 2.0%.

Previously, the city provided 200 billion won in special funds for global risk response, 200 billion won for exchange rate care, and 800 billion won in funds for small business owners.

According to a survey by the Busan Chamber of Commerce and Industry, the main management risks for companies were identified as rising raw material and energy costs, as well as exchange rate volatility.

Bongcheol Kim, Director of the Digital Economy Bureau of Busan City, stated, "We have expanded financial support to respond to external uncertainties," and added, "We will continue to provide policy support so that companies can focus on their management."

Busan City Hall.

원본보기 아이콘

© The Asia Business Daily(www.asiae.co.kr). All rights reserved.