Korea Development Bank (KDB) is doing its best to do business as usual to overcome the MERS outbreak. It will provide 100 billion won in emergency loans to SMEs and will consider extending the repayment period of some leans, the bank said.
The emergency MERS loans will be released to SMEs up to a maximum of 2 billion won per company.
The emergency MERS loans is in addition to a Contingency Loan plan that KDB has provided to SMEs every year since 2004 for companies whose operations have been damaged by various natural disasters, such as floods and typhoons, to help them get back on their feet. For more information call: (02) 787-6906.
The emergency loans will go to SMEs which have suffered contractions in sales of their products and services due to MERS, plus the companies that deal with them, including non-profit companies.
KDB will either provide fresh operating funds or extend the repayment period of existing loans to SMEs whose operations have been hurt by MERS, all within the limit of 100 billion won for the next two years. All loans made in won, the U.S. dollar, the yen, and euro will be included in the emergency measures. All loans that are repayable this year can be extended for the maximum period of one year, provided the borrowers can prove that they received damage from the MER communicable disease effective form June 15. The support measures provided to the MERS-hit SMEs will be for three months, which can be extended if needed.
Celebrating the 61st anniversary of its founding and marking the first year of integration, Korea Development Bank has set out to reinforce its role as policy finance implementer.
The state-run bank launched the New Start KDB Prime Rate Loan to support small and medium-sized companies and thus to back up the government’s creative economy goals, according to KDB officials.
The special loan scheme, operating on a 2 trillion won budget ($1.8 billion), will offer an interest rate benefit to SMEs that seek loans to improve their management or to expand facilities.
The maximum interest rate cut is 1 percent for the Korean won, and 0.4 percent for other currencies such as the U.S. dollar, yen and euro.
“SMEs are the key players in the nation’s economic growth and job creation,” said a KDB official. “As the largest state-run policy financing institution, we will continuously work to expand our exclusive services for SMEs.”
A special fund to back the overseas expansion of SMEs was also introduced, in order to minimize the investment risks for export companies and to encourage them to pioneer new sources of revenue in the global market.
The special fund will operate on a budget of 500 billion won, of which 300 billion has been allocated exclusively to SMEs.
Export companies may enjoy an interest rate cut of up to 0.5 percent when taking the loan in the Korean won.
“The increasing volatility of the global financial market has made it difficult for Korean companies to make profitable investments,” the official said.
“The purpose of the fund is to support SMEs to (help them) overcome current hardships and to make inroads into the market.”
To execute these projects, the KDB is planning to execute 35 trillion won, or 55.4 percent, of its yearly budget within the first half of the year, hoping that the financial benefits may revitalize the nation’s economy.
In January this year, KDB kicked off as a new integrated policy financing body after merging with the Korea Finance Corporation.
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