36 Trillion Won Financial Support from Banking Sector During Seollal Holiday

[Asia Economy Reporter Song Hwajeong] To support small and medium-sized enterprises and small business owners struggling due to COVID-19, the financial sector will provide approximately 36.8 trillion KRW in funds around the Lunar New Year holiday.

According to the Financial Services Commission on the 29th, about 36.8 trillion KRW of new funds will be supplied around the Lunar New Year holiday, including 4.5 trillion KRW from policy financial institutions and 32.3 trillion KRW from banks.

First, policy financial institutions such as Industrial Bank of Korea, Korea Development Bank, and Korea Credit Guarantee Fund will proactively support a total of 4.5 trillion KRW in new loans and guarantees, including 3.8 trillion KRW in new loans and 700 billion KRW in new guarantees through special branch fund support consultations. The support period covers from the 30 days before the holiday to 15 days after, spanning from the 3rd of this month to the 18th of next month.

Industrial Bank of Korea will provide new funds totaling 3 trillion KRW per company, up to a maximum of 300 million KRW, for working capital purposes such as raw material payment settlements, employee salaries, and bonuses. For settlement-type fund loans, interest rate reductions within a range of 0.3 percentage points will be offered.

Korea Development Bank will supply 800 billion KRW in new funds for working capital through branch consultations and screenings, offering interest rate reductions within a maximum range of 0.4 percentage points.

Korea Credit Guarantee Fund will provide 700 billion KRW in new guarantees to prepare for the expected increase in required funds before and after the Lunar New Year. Utilizing the COVID-19 damage support guarantee system, it will simplify screening procedures and offer preferential treatment on guarantee fees, guarantee ratios, and guarantee limits.

Additionally, these policy financial institutions will extend the maturity of existing loans and guarantees amounting to 8.4 trillion KRW.

The banking sector will supply approximately 32.3 trillion KRW in new loans around the Lunar New Year holiday. Major banks such as NH Nonghyup Bank, Shinhan Bank, Woori Bank, Hana Bank, and Kookmin Bank will each provide 6 trillion KRW in new loans. Alongside this, Shinhan, Woori, Hana, and Kookmin Banks will each extend the maturity of existing loans by 9 trillion KRW, while Nonghyup will extend 5 trillion KRW.