To Support SMEs Facing the 3 Highs Crisis, 21 Trillion Won in Policy Finance to Be Supplied This Year

Rapid Liquidity Supply Initiatives from the Beginning of 2024

The Ministry of SMEs and Startups (Minister Lee Young) announced on the 28th that as of the end of November, it has supplied loans and guarantees totaling 21.131 trillion KRW to overcome the triple crisis of high inflation, high interest rates, and high exchange rates that hit small and medium-sized enterprises (SMEs) this year, as well as to promote innovative growth and support business recovery.

In January this year, the Ministry of SMEs and Startups announced the 'Financial Support Measures for SMEs to Respond to the Complex Crisis' together with the Financial Services Commission, setting a goal to supply 20.8764 trillion KRW through loans and guarantees by the Small and Medium Business Corporation, Regional Credit Guarantee Foundations, and Korea Technology Finance Corporation.

To ensure rapid policy finance supply, the Ministry of SMEs and Startups opened applications for all 31 support projects within the first quarter. Subsequently, through additional efforts such as changes in fund operation plans to expand supply, it supplied 21.131 trillion KRW in 11 months, exceeding the initial target.

In particular, the Small and Medium Business Corporation introduced a policy priority evaluation system this year, reforming the previous first-come-first-served fund application method to a system that grants application opportunities to all companies. Through this, policy funds could be supplied quickly to SMEs with high policy support needs.

Additionally, the Ministry supported the reduction of financial costs for SMEs by lowering the guarantee fee rate by 0.2 percentage points for new guarantees from Regional Credit Guarantee Foundations and Korea Technology Finance Corporation, and by reducing the base interest rate of policy funds from the Small and Medium Business Corporation by 0.3 percentage points in the second half of the year.

A Ministry of SMEs and Startups official stated, "While steadily promoting the creation of a 10 trillion KRW venture fund over five years, we plan to promptly establish loan and guarantee supply plans for each policy finance institution and swiftly supply policy finance from the beginning of 2024 as well."