Korea Technology Finance Corporation (KOTEC) said on the 22nd that it signed a "financial inclusion support agreement to help small and midsize corporations overcome crises caused by the Middle East war" with KB Kookmin Bank and Hana Bank.
The agreement was prepared to ease the financial burden on import-export small and midsize corporations struggling as exchange rates and oil prices rise and logistics costs increase amid external instability such as the prolonged Middle East war, and to support business stability through swift funding.
Under the agreement, KOTEC plans to provide a total of 453.4 billion won in agreement guarantees, funded by KB Kookmin Bank's 3 billion won in special contributions and 2 billion won in guarantee fee support, and Hana Bank's 3 billion won in special contributions and 2 billion won in guarantee fee support.
Eligible recipients are new-technology businesses that meet KOTEC's technology guarantee requirements, including: ▲ corporations that export (or are expected to export) directly to the Middle East ▲ raw material demand corporations damaged by disruptions in the supply chain of Middle Eastern crude oil ▲ corporations experiencing management difficulties due to the deteriorating economic environment from the Middle East war ▲ other corporations recommended by banks.
To reduce corporations' financial burden, KOTEC will raise the guarantee coverage ratio from 85% to 100% and provide a guarantee fee reduction of up to 0.4 percentage point for three years. KB Kookmin Bank and Hana Bank plan to support guarantee fees of up to 0.7 percentage point for two years.
With this agreement as a starting point, KOTEC will build an organic cooperation system with each agreement bank and actively support smooth financing and export recovery for small and midsize venture corporations facing difficulties from external uncertainty.
KOTEC Chair Kim Jong-ho said, "We will expand cooperation with financial institutions to build a financial support system that can respond preemptively in times of crisis and actively support the business stability of affected corporations."