To ease hardships in the real economy, the financial sector will provide 101 trillion won in funding to small and midsize corporations.
The Financial Services Commission on the 28th outlined plans to supply funds through the financial sector during the Chuseok holiday and to improve consumer convenience. The aim is to prepare for a possible increase in funding needs before and after the Chuseok holiday.
Policy finance institutions will preemptively support special loans and guarantees totaling 22.2 trillion won for small and midsize corporations. The Korea Development Bank will supply 3.9 trillion won for working capital while offering interest rate cuts of up to 0.4 percentage point. The Industrial Bank of Korea will also lend up to 300 million won per corporation for working capital, and will provide an interest rate reduction within 0.3 percentage point for settlement-type funds. In effect, this amounts to supplying 9.3 trillion won in funding.
Banks will provide 78.7 trillion won in loans to small corporations and microbusiness owners, reflecting preferential interest rates based on transaction contribution and credit ratings. The Korea Inclusive Finance Agency (KINFA) will support 5 billion won in special funds for traditional market merchants. It will also offer small loans of up to 10 million won at annual interest rates within 4.5% through merchants' associations for the two months before the Chuseok holiday.
Meanwhile, if loans from financial companies mature between Oct. 3 and 9 during the Chuseok holiday, the maturity will be automatically extended to Oct. 10 of the same month without interest in arrears. In consultation with the financial company, borrowers may also repay early on Oct. 2, before the holiday, without a prepayment fee.
Credit card payments will also be automatically withdrawn from the payment account on Oct. 10 without late fees in arrears. This applies to insurance premiums, telecom bills, and public charges as well. Deposits at financial companies that reach maturity will be refunded on the same day, including the portion of interest accrued during the Chuseok holiday period. However, dwellings pensions will be paid in advance on Oct. 2.