Kbank Signs Agreements with Jeonbuk, Pohang, and Gumi to Expand Region-Specific Inclusive Finance

Kbank is joining hands one after another with metropolitan and basic local governments such as Jeollabuk-do Province, Pohang City, and Gumi City to provide financial support for local small business owners. The plan is to supply low-interest operating funds of 20 billion won to Jeollabuk-do, and to Pohang and Gumi to introduce special guarantee programs under which the local governments subsidize 3% per annum of loan interest, thereby reducing financing costs.

Kbank announced on the 23rd that earlier this month it signed separate "Business Agreements on Special Guarantees for Small Business Owners" with Jeonbuk Special Self-Governing Province (February 9), Pohang City (February 6), and Gumi City (February 13), and that it will provide practical financial support to individual business owners and small merchants suffering from the regional economic downturn.

Under the agreement with Jeonbuk Special Self-Governing Province, the supply scale has been expanded. To promote the "Financial Support Program for Small Business Owners' Recovery (Bodeum Fund)" together with Jeonbuk Special Self-Governing Province and the Jeonbuk Credit Guarantee Foundation, Kbank will make a special contribution of 800 million won and, based on this, provide low-interest operating funds totaling 20 billion won to small business owners in the province.

The Jeonbuk support program subdivides the targets into three tracks: management-challenged businesses (up to 70 million won), first-time partner businesses (up to 100 million won), and growth and development businesses (up to 200 million won), offering loan limits tailored to industry type and sales conditions. The maximum loan term is eight years, and the guarantee coverage ratio is 90%. Jeonbuk Special Self-Governing Province will subsidize 1.0% per annum of interest for three years.

The agreements with Pohang City and Gumi City are Kbank's first guarantee agreements made directly with basic local governments (cities) without going through a metropolitan government. Together with the Gyeongbuk Credit Guarantee Foundation, Kbank will contribute 200 million won to each city for the Pohang "Hope Companion" and Gumi "New Hope" special guarantee programs and implement special guarantees totaling about 5 billion won. The core of the Pohang and Gumi agreements is the extent of interest support: the local governments will subsidize 3% per annum of loan interest for two years, thereby reducing the effective interest burden. The loan limit is up to 50 million won (up to 100 million won if certain conditions are met), and the guarantee coverage ratio is 100%. Repayment methods will be operated flexibly, including a structure of two years of grace followed by three years of installment repayment. Products under these three local government agreements can be applied for non-face-to-face via the Kbank app or the Credit Guarantee Foundation app, and early repayment fees are fully exempted.