Bank of Korea Extends Temporary Special Support for SMEs by Six Months... Until End of July

The Monetary Policy Board of the Bank of Korea announced on January 15 that it has decided to extend the operation period of the "Temporary Special Support for Small and Medium-Sized Enterprises" through the Bank Intermediated Lending Support Facility by six months.

As a result, the support period, which was previously set to end at the end of January, will be extended until the end of July (31st). Even if new loans are suspended after that, support for the outstanding balance of existing loans will continue until maturity (up to one year). The Monetary Policy Board explained, "Although the economic recovery continues, as seen in the rebound in consumption and increased exports, the recovery of vulnerable sectors such as local small and medium-sized enterprises and self-employed businesses is delayed, so it is necessary to continue support for these sectors."

The Temporary Special Support for Small and Medium-Sized Enterprises was introduced in January 2024 with a limit of 9 trillion won and was operated for six months, with the deadline extended twice, in July of that year and in July of the previous year. In January of last year, the limit was increased by 5 trillion won, bringing the total to 14 trillion won (2.8 trillion won for Seoul, 11.2 trillion won for regions outside Seoul).

Meanwhile, the Bank of Korea plans to reform the Bank Intermediated Lending Support Facility within the year to strengthen its function as a monetary policy tool. The Bank of Korea stated, "During the reform process, programs that were introduced and operated temporarily will be terminated in a timely manner, and we will improve and supplement the system to enhance flexibility in response to changes in economic conditions."