Pohang City Joins Forces with Financial Institutions to Tackle Regional Economic Crisis... Attends Emergency Meeting

Responding to the Steel Industry Restructuring Crisis...
Seeking Cooperation Measures with the Financial Sector
"Finance as a Breakwater for the Local Economy"
Emphasizing Customized Support and Collaboration

On July 29, Pohang City held a "Meeting of Financial Institution Heads to Overcome the Regional Economic Crisis" at the Pohang Chamber of Commerce and Industry's main conference room, where intensive discussions took place on public-private-financial cooperation measures to restore the local economy, which is struggling due to factors such as restructuring in the steel industry.

Pohang City attended the "Financial Institution Heads Meeting to Overcome the Regional Economic Crisis" at the Pohang Chamber of Commerce and Industry on the 29th. Photo by Pohang City

At the meeting, participants included Mayor Lee Kangdeok, City Council Chairman Kim Ilman, representatives from the Pohang Chamber of Commerce and Industry, Steel Management Corporation, Bank of Korea Pohang Branch, heads of major local financial institutions, Gyeongbuk Credit Guarantee Foundation, Korea SMEs and Startups Agency, Korea Credit Guarantee Fund, Korea Technology Finance Corporation, and other related organizations. They exchanged opinions on support measures for small business owners and self-employed individuals, the current crisis facing regional manufacturing industries including the steel sector, and the need for financial support.

At the meeting, the Pohang Chamber of Commerce and Industry presented the financial status of local businesses for the first half of the year and the business outlook for the third quarter. They diagnosed that the liquidity crisis across the manufacturing sector, including steel, is deepening, and explained that deteriorating loan conditions due to declining credit ratings are tightening overall access to capital.

The Bank of Korea Pohang Branch analyzed that the regional economy is facing a complex recession due to the downturn in the steel industry, shrinking consumption, and worsening financial conditions. They noted that with declining steel production and exports, weakening consumer sentiment and real estate markets, household loans are turning to a downward trend while demand for corporate facility funds is increasing, indicating changes in financial flows.

At the meeting, Pohang City outlined its financial policy direction for responding to the local economic crisis and measures to restore the livelihoods of residents, proposing practical and sustainable financial solutions such as: ▲emergency operating funds for small business owners and customized financial support for self-employed individuals in crisis; ▲expansion of debt restructuring and special guarantees for small and medium-sized enterprises; ▲provision of unsecured loans for young entrepreneurs; and ▲introduction of Pohang-specific financial products for steel industry partner companies.

The city also requested that financial institutions, in the face of a complex crisis of high interest rates and domestic market stagnation, implement more flexible loan screening, launch financial products reflecting local characteristics, strengthen financial support for small businesses and SMEs, and establish a system for continuous sharing of information on support programs by institutions such as the Korea Credit Guarantee Fund.

Representatives from the Pohang Chamber of Commerce and Industry and the Steel Management Corporation expressed their commitment to actively serve as a communication channel with financial institutions to overcome the regional industrial crisis.

Pohang Chamber of Commerce and Industry Chairman Na Jooyoung stated, "This meeting was significant as it brought together financial institutions and key players in the local economy to discuss practical solutions, not only for Pohang's steel industry but also for the secondary battery industry, both of which are facing difficulties amid tariff crises. Going forward, we will continue to communicate with financial institutions and faithfully serve as a bridge for companies and small business owners to help overcome the regional industrial crisis."

Mayor Lee Kangdeok stressed, "The crisis in the steel industry must be approached as a matter of regional survival. With the local economy being fundamentally shaken by plant closures, shutdowns and closures of partner companies, and job losses, there are limits to what local governments can do alone. Responsible cooperation and practical support from financial institutions are urgently needed."

Based on the key issues discussed at the meeting, the city plans to continue working-level consultations with local financial institutions and to launch full-scale policy responses to overcome the regional economic crisis through cooperation with central government agencies such as the Ministry of Trade, Industry and Energy and the Ministry of SMEs and Startups.