In a bid to bolster key sectors and aid small businesses grappling with high interest rates, South Korea has announced a substantial financial support program totaling 75.9 trillion won ($56.97 billion).
The program, revealed by the Financial Services Commission, includes a significant allocation of 15 trillion won in cheap policy loans from a state-run bank aimed at supporting crucial industries such as semiconductors and batteries. Additionally, commercial banks are set to provide 20 trillion won to assist small and medium-sized enterprises (SMEs).
Chairman Kim Joo-hyun emphasized the importance of banks expanding their support beyond consumer financing, particularly focusing on mortgage loans. He noted, “Our banks need to start making efforts to expand support for companies, beyond consumer financing focused on mortgage loans.”
The evolving trade relations with China, coupled with technological advancements in major industries and the fragmentation of global supply chains, have presented new challenges for companies. This has heightened the need for regulatory reform and financial support, as highlighted by Kim.
To aid companies facing liquidity challenges this year due to high interest rates, banks will offer a temporary cut in interest rates, according to the commission’s statement.
The comprehensive support package reflects South Korea’s commitment to strengthening its economy and ensuring the resilience of its key industries and SMEs in the face of evolving global economic dynamics.
(Source: WSJ)
