IBK Industrial Bank of Korea said March 24 it will launch a 2 trillion won ($) “regional balanced growth” financing package to strengthen the competitiveness of small and midsize companies outside the capital area.
The package consists of three programs: liquidity support (1 trillion won), financing-cost relief (1 trillion won) and business restructuring support.
The liquidity program targets companies in regional strategic industries and firms relocating to provincial areas. It offers a 0.6 percentage point cut in guarantee fees and up to a 1.3 percentage point reduction in loan rates for three years. To fund the program, the bank will make a special 42 billion won contribution to the Korea Credit Guarantee Fund and the Korea Technology Finance Corp.
The financing-cost relief program will be linked to interest-subsidy loans backed by local governments and public institutions, under which they cover the gap between commercial bank rates and a policy target rate. IBK said it will add up to a 1.0 percentage point rate cut on top of local-government benefits to ease interest burdens for regional companies.
Under the business restructuring program, the bank will provide investment and financing to strong regional companies that need to shift their business lines, aiming to help provincial SMEs improve their fundamentals and pursue sustainable growth.
IBK CEO Jang Min-young said the bank will “take the lead in balanced regional development” by offering “meaningful rate benefits that regional SMEs can feel” and supporting local industrial ecosystems.
* This article has been translated by AI.
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