NH Nonghyup Bank "Active Support to Ease Interest Burden for Small and Medium Enterprises"

Cooperation in SME Support Program to Ease Interest Burden

Interest Rate Reduction for Farmers and Agri-food Companies, Special Contribution by Regional Credit Guarantee Foundation

New Fund Supply of 1 Trillion Won for Small Businesses and SMEs

[Asia Economy Reporter Sim Nayoung] NH Nonghyup Bank announced on the 26th that it will implement financial support measures to alleviate the burdens of farmers, small and medium-sized enterprises (SMEs), and small business owners who are struggling due to high interest rates, high inflation, and high exchange rates. The bank plans to actively participate in the SME financial support program, including automatic principal reduction of loans, which is jointly implemented by the banking sector.

For SME credit loans with an interest rate exceeding 7%, the interest rate will be reduced by up to 3 percentage points when extending the loan term. The reduced interest amount will be used to repay the loan principal.

Special fixed-rate loans will be provided at interest rates lower than variable rates. When applying for a new credit loan with a fixed interest rate, the loan will be executed with an interest rate reduced by up to 1 percentage point to the level of the variable rate. Customers will be offered an interest rate conversion option (available every 6 months during the loan period) to switch to a variable rate depending on future interest rate changes.

To share the burden with financially vulnerable groups such as struggling farmers, SMEs, and small business owners, loan interest rates will be lowered. The preferential interest rate for farmers will be expanded to 0.5%, and for SMEs and small business owners engaged in the agro-food industry, the preferential interest rate will be expanded to 0.3%.

For young people facing difficulties due to rising interest rates, the preferential interest rate for the Youth Jeonse Rent Mutual Support program will be increased up to 0.5%. The interest rate on variable-rate mortgage loans was reduced by 0.8 percentage points starting from the 20th.

To ease the debt burden of delinquent farmers and SMEs, the delinquency penalty interest rate will be reduced by up to 3 percentage points. To resolve funding difficulties and stabilize management for small business owners and SMEs, a special contribution of 70 billion KRW will be made to regional credit guarantee foundations to support new funds worth 1 trillion KRW. Preferential interest rate benefits of up to 1.5% will also be provided when this financial support is given.

Bank President Lee Seok-yong stated, "We will continue to prioritize public interest values and do our best to fulfill Nonghyup Financial’s original role as a mediator connecting urban and rural areas, sharing joys and sorrows with farmers, SMEs, and local communities."