2 Trillion Low-Interest Loans for SME Low-Carbon Transition... FSC, 5 Major Banks, and Samsung Electronics Join Forces

Annual Carbon Emissions Expected to Decrease by 850,000 Tons

The five major financial holding companies and Samsung Electronics will provide low-interest loans worth 2 trillion won for small and medium-sized enterprises' (SMEs) low-carbon transition investments. On the 24th, the Financial Supervisory Service announced that it signed a business agreement with financial holding companies including KB, Shinhan, Hana, Woori, NH, Samsung Electronics, and SMEs to support responses to the climate crisis. The agreement involves cooperation among participating institutions to supply necessary funds at low interest rates for SMEs' low-carbon transition and related regulatory compliance.

The funding consists of 1 trillion won in deposits from Samsung Electronics and 1 trillion won from the financial companies' own funds. Samsung Electronics will deposit 1 trillion won with the five major banks, and the interest from these deposits will be used to support loan interest for SMEs cooperating in climate crisis response investments.

When SMEs take out loans for purposes that comply with the Korean Green Classification System, an additional discount rate will be applied on top of the existing preferential loan interest rates (0.5% to 1.7 percentage points). Even if the purpose does not comply with the Green Classification System, if there are effects such as carbon reduction or prevention of major accidents, a discount rate will be applied to the existing preferential loan interest rates.

The Financial Supervisory Service expects that investments through this program will reduce carbon emissions by 850,000 tons annually, and when the EU's Carbon Border Adjustment Mechanism is implemented in 2026, SMEs could reduce carbon emission costs by 90 million won per company annually.

Additionally, from the SMEs' perspective, this program's discount rates could reduce annual interest expenses by 65 billion won.

In his opening remarks, Lee Bok-hyun, Governor of the Financial Supervisory Service, said, "According to recent research, the anticipated damage from the future climate crisis could reduce domestic GDP by about 20%. Investment in responding to the climate crisis may be perceived as a cost in the short term, but in the long term, it is the responsibility of the current generation to leave a sustainable future for the next generation."