The Bank of Korea will extend its low-interest loan support for small and medium-sized enterprises (SMEs) under a temporary special assistance program for six months, until the end of January next year. Additionally, it will support SMEs and self-employed workers in areas affected by heavy rainfall through the Financial Intermediation Support Loan.
On the 24th, the Monetary Policy Committee held a plenary session and decided to extend the deadline for the Financial Intermediation Support Loan, which had been allocated a limit of 9 trillion won under the 'temporary special support for small and medium-sized enterprises' initiated in January last year, by six months.
Since introducing the temporary special support of 9 trillion won in January last year, the Monetary Policy Committee has extended it once and increased it by 5 trillion won in January this year, now operating at a total limit of 14 trillion won. With this decision, the lending support for SMEs through the Financial Intermediation Support Loan will continue until the end of January next year at a scale of 14 trillion won.
The Financial Intermediation Support Loan is a system where the Bank of Korea lends money to commercial banks at low interest rates to support small and medium-sized enterprises. Each bank determines the lending rates for SMEs based on the support interest rates and ratios from the Financial Intermediation Support Loan. The current interest rate for the Financial Intermediation Support Loan is 1.0% annually.
Considering the difficulties faced by local SMEs, the Bank of Korea allocated 80% of the total limit to 15 regional headquarters, while the remaining 20% is designated for the Seoul area. SMEs with low credit ratings located in Seoul and other local areas, as well as self-employed individuals, are also eligible for support. However, certain sectors like nightlife and real estate are excluded from the support.
The Monetary Policy Committee also decided to allocate 30 billion won in emergency funds to regional headquarters serving areas affected by heavy rainfall from the reserve portion of the Financial Intermediation Support Loan limit. The allocation amounts for each regional headquarters are as follows: ▲Gwangju-Jeonnam 10 billion won ▲Gyeongnam 10 billion won ▲Daejeon-Sejong-Chungnam 5 billion won ▲Gyeonggi 5 billion won.
The fund support targets SMEs that have been damaged by the recent heavy rainfall. They must receive a damage certification from local governments or town and village offices. The support ratio is 100% of the amount lent by the financial institutions.
The Bank of Korea plans to review the situation regarding damage from heavy rainfall and the loan demands of the affected SMEs and provide additional support if necessary.