The Ministry of SMEs and Startups and the Korea SMEs and Startups Agency (KOSME) said on the 20th they will implement a "special maturity extension in response to the high exchange rate and Middle East situation" for small and medium-sized enterprises facing management difficulties due to the recent strong dollar and the fallout from the Middle East conflict.
Rising exchange rates and instability in the Middle East have increased raw material import expense and logistics costs, eroding the profitability of small and medium-sized enterprises. In particular, liquidity pressures are mounting on corporations with high import dependence and those exporting to the Middle East. In response, the Ministry of SMEs and Startups (MSS) and the Korea SMEs and Startups Agency (KOSME) prepared this measure to ease corporations' repayment burdens and prevent a chain of defaults.
The beneficiaries are small and medium-sized enterprises among corporations holding an outstanding loan balance from KOSME policy funds that are experiencing management difficulties due to the high exchange rate and the Middle East situation. In addition, the corporations must have principal repayment due this year and either have raw material and goods imports accounting for 20% or more of revenue, or export to Middle Eastern countries.
Through this special maturity extension, corporations can extend principal repayment on policy fund loans for one year. Notably, under this special measure, no minimum principal repayment condition will be applied, and no additional interest for the extension will be charged, minimizing corporations' burdens.
Applications are open from Mar. 20 to Dec. 31. Corporations using KOSME direct loans can apply through KOSME, and those using agency loans can apply through the handling bank.
However, corporations in arrears on national or local government tax (excluding those granted a stay of disposition), corporations in arrears with financial institutions, corporations that are closed or suspended, and corporations undergoing rehabilitation or workouts are excluded. Support is also restricted if guarantor consent is not obtained or if the handling bank for agency loans does not meet its internal standards.
Kang Seok-jin, chair of KOSME, said, "In the unique external economic environment of a high exchange rate and the Middle East crisis, we will do our utmost to serve as a reliable pillar so that our small and medium-sized enterprises do not collapse due to a temporary liquidity crunch."